PUBLIC SUMMARY REPORT

RSPO SECOND ANNUAL SURVEILLANCE ASSESSMENT (ASA2)

PT INTI INDOSAWIT SUBUR – MUARA BULIAN GROUP AND SCHEME SMALLHOLDERS Jambi Province, Sumatra, INDONESIA

Report Author: Haeruddin Tahir – August 2014 Revised September 2014

BSI Group Singapore Pte Ltd (Co. Reg. 1995 02096‐N) PT. BSI Group Indonesia 1 Robinson Road Menara Bidakara 2, 17th Floor Unit 5 AIA Tower #15‐01 Jl. Jend. Gatot Subroto Kav. 71‐73 Singapore 048542 Komplek Bidakara, Pancoran Tel +65 6270 0777 Jakarta Selatan 12870 ‐ Indonesia Fax +65 6270 2777 Tel +62 21 8379 3174 ‐ 77 www.bsigroup.sg Fax +62 21 8379 3287 Aryo Gustomo: [email protected]

TABLE of CONTENTS page № SUMMARY...... 1 Abbreviations Used...... 1 1.0 SCOPE OF CERTIFICATION ASSESSMENT...... 1 1.1 National Interpretation Used...... 1 1.2 Certification Scope...... 1 1.3 Location and Maps...... 1 1.4 Description of Supply Base...... 1 1.5 Date of Plantings and Age profile...... 2 1.6 Other Certifications Held...... 2 1.7 Organisational Information / Contact Person...... 2 1.8 Time Bound Plan for Other Management Units...... 2 1.9 Area of Plantation...... 3 1.10 Approximate Tonnages Certified...... 3 1.11 Date Certificate Issued and Scope of Certificate...... 3 2.0 ASSESSMENT PROCESS...... 3 2.1 Certification Body...... 3 2.2 Qualifications of the Lead Assessor and Assessment Team...... 3 2.3 Assessment Methodology, Programme, Site Visits...... 4 2.4 Stakeholder Consultation and List of Stakeholders Contacted...... 4 2.5 Date of Next Surveillance Visit...... 4 3.0 ASSESSMENT FINDINGS...... 5 3.1 Summary of Findings – Existing Certified Units...... 5 3.2 Summary of Findings – Scheme Smallholder...... 16 3.3 Detailed Identified Nonconformities, Corrective Actions and Auditor Conclusion...... 22 3.4 Noteworthy Positive Components...... 26 3.5 Issues Raised by Stakeholders and Findings with Respect to Each Issue...... 26 4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY...... 26 4.1 Date of Next assessment...... 26 4.2 Date of Closing Nonconfirmities (Major and Minor)...... 27 4.0 Acknowledgement of Internal Responsibility and Formal Sign‐off of Assessment Findings...... 27

LIST of TABLES 1 GPS Location of Mills ...... 1 2 Muara Bulian Mill Supply Base ...... 2 3(a) Age Profile of Palms ...... 2 3(b) Scheme Smallholders’ Age profile of palms ...... 2 4(a) Estates and Area of Palms ...... 3 4(b) Smallholder Numbers and Area of Palms...... 3 5(a) Muara Bulian Mill Approximate CPO Tonnages Certified and Actual Production ...... 3 5(b) Muara Bulian Mill Approximate PK Tonnages Certified and Actual Production...... 3 5(c) Approximate Tonnages Certified during ASA2 ...... 3

LIST of FIGURES 1 Location Maps ...... 28

List of Appendices A Time Bound Plan B RSPO Certificate Details C Assessment Programme D List of Stakeholders Contacted E Supply Chain Assessment for the Mills (Module E: Mass Balance) RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 1

SUMMARY PT IIS PT Inti Indosawit Subur R&D Research and Development BSI has conducted the second annual surveillance RKL Rencana Pengelolaan Lingkungan assessment of PT Inti Indosawit Subur (PT IIS) Muara (Environmental Management Plan) Bulian Palm Oil Mill and supply base located in Jambi RPL Rencana Pemantauan Lingkungan Province, Sumatera, Indonesia. The group comprising (Environmental Monitoring Plan) one mill, one company managed estate, scheme SEIA Social & Environmental Impact Assessment smallholders, support service and infrastructure. SOP Standard Operation Procedure BSi concludes that PT Inti Indosawit Subur – Muara SPSI All Indonesian Workers Union Bulian group operations and the scheme smallholders 1.0 SCOPE OF CERTIFICATION ASSESSMENT comply with the requirements of RSPO Certification System June 2007 (revised March 2011) including Annex 1.1 National Interpretation Used 4: Procedures for Annual Survaillance, RSPO Principles & The operations of the mill and their supply bases were Criteria: November 2007; Indonesia National assessed against the RSPO INA‐NIWG: May 2008 and Interpretation of RSPO P&C, 2008; and Indonesian INA‐SWG: 2009 of the RSPO Principles and Criteria: National Interpretation of RSPO P&C for Scheme 2007; RSPO Certification System June 2007 (revised Smallholder 2009. The palm oil mill was also assessed March 2011) including Annex 4: Procedures for Annual against the RSPO Supply Chain Certification Standard for Survaillance, and RSPO Supply Chain Certification the compliance to the requirement for the CPO mills Standard: November 2011, Module E – CPO Mills: Mass (RSPO SCCS: November 2011). It is noted that the mill Balance. have implemented Mass Balance (Module E – Mass Balance) of RSPO SCCS requirement to ensure traceability of the incoming and out‐going product. 1.2 Certification Scope The scope of Certification covers one (1) Palm Oil Mill BSI recommends the continuation of Muara Bulian and the supply base comprising one (1) company’s Group which consist of Muara Bulian mill, Muara Bulian owned Estate and six (6) cooperatives of Scheme estate and the Scheme Smallholders to be approved as a Smallholder. producer of RSPO certified sustainable palm oil. 1.3 Location and Maps ABBREVIATIONS USED The Muara Bulian Group Mill, Estate and Scheme AMDAL Analisis Mengenai Dampak Lingkungan smallholders are located in Batang Hari District, Jambi B3 Hazardous waste Province, Indonesia (Figure 1). The GPS location of the BOD Biological Oxygen Demand mills is shown in Table 1. BPN Badan Pertahanan Nasional CD Community Development Table 1: Mills GPS Locations CLA Collective Labour Agreement CPO Crude Palm Oil MILL Longitude Latitude CSR Corporate Social Responsibility Muara Bulian E 103°12’20” S 01°35’09” DPPL Dokument Pengelolaan dan Pemantauan (Capacity: 60 t/hr) Lingkungan Hidup (Environment management And monitoring document) 1.4 Description of Supply Base EFB Empty Fruit Bunch EMS Environmental Management System Oil palm FFB is sourced from company owned estate, FFB Fresh Fruit Bunch scheme smallholders and from third party/outgrowers, GPS Global Positioning System where outgrowers are excluded from certification HCV High Conservation Value scope. The Muara Bulian Group’s projection of FFB HGU Hak Guna Usaha productions (certified) for the year 2014 are listed in HO Head Office Table 2 as shown below. IPM Integrated Pest Management ISCC International Sustainable Carbon Certification ISO International Standards Organisation ISPO Indonesia Sustainable Palm Oil Foundation IUCN International Union for Conservation of Nature

KUD Koperasi Unit Desa (Cooperatives) MSDS Material Safety Data Sheet NGO Non Government Organisation OER Oil Extraction rate OSH Occupational Safety and Health PK Palm Kernel PMP Project Management Plan POME Palm Oil Mill Effluent PPE Personal Protective Equipment PPKS Pusat Penelitian Kelapa Sawit

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Table 2: Muara Bulian Mill FFB Supply Details Table 3b: Scheme Smallholders’ Age profile of palms

Source Estimation Actual Projection Age Total Planted Area % of planted area as at as for as at ASA2 (years) (ha) ASA01 2013 (2014) 1991 548 7.88 (2013) 1992 924 13.28 Estate Supply Base 1993 2,544 36.56 Muara Bulian estate 47,598 35,876 44,059 1994 644 9.26 1995 50 0.72 Sub-total 47,598 35,876 44,059 1999 175 2.52 2000 1,172 16.84 Scheme Smallholders: 2001 513 7.37 KUD Barokah 28,050 27,015 26,870 2006 388 5.58 KUD Sumber Makmur 26,320 24,641 24,480 Total 6,958 100.00 KUD Budi Sari 19,676 16,680 24,275 KUD Makmur Rejeki 17,210 15,005 14,692 KUD Karya Lestari 16,450 13,845 15,345 1.6 Other Certifications Held KUD Tuah Sakato 41,193 34,513 39,513 Sub-total 148,899 131,699 145,175 PT IIS which managing the scheme smallholder has Total Certified FFB 196,497 167,575 189,234 implemented an Environmental Management system and was awarded ISO 14001 Certification on 10th June Outgrowers * 34,189 53,042 25,000 2011 – Certificate Number ID05/65250 – expiry date 10 Total Muara Bulian 230,686 220,617 214,234 June 2014. The palm oil mill is also under ISCC supply certification on 3th September 2014 with Certificate *Outgrowers is excluded from the certification scope number: EU‐ISCC‐Cert‐DE100‐20141661 The scheme smallholders comprise six cooperatives and management advice on best practices given by the 1.7 Organisational Information / Contact Person scheme manager from PT IIS. There are 3,455 members in these smallholder schemes covering an area of 6,958 The contact details as follows: ha planted with oil palm. The scheme smallholder PT Inti Indosawit Subur contributes about 64% of the total FFB processed in the Contact Person: Ms. Asrini Subrata certification units (Muara Bulian mill). Email: [email protected] Jakarta Office: Muara Bulian Scheme Smallholder was developed as a Jl. M.H. Thamrin No. 31 Jakarta INDONESIA 10230 part of PT IIS – Muara Bulian Group plantation Phone: +62 21 2301119 development. The cooperatives of scheme smallholder Fax: +62 21 230 1120 were assessed by BSI as part of company’s commitment Site Location: to bring the scheme smallholder into RSPO certification Singoan / Bukit Sari Bullian Jaya Village, Muara Bulian/ scheme. Pemayung District, Batang Hari Regency Jambi – Indonesia In this summary report, the findings of the scheme smallholders are incorporated due to the certification unit of Mill and Estate are already certified and were 1.8 Time Bound Plan for Other Management Units assessed as part of the first surveillance. PT Inti Indosawit Subur is a member of RSPO and 1.5 Date of Plantings and age profile has been involved in the Roundtable process since 2006; RSPO Membership No: 1‐0022‐06‐000‐00. PT IIS – Muara Bulian Group own estate was planted in early 1991. The smallholder scheme was planted There are 19 palm oil mills and supply base (estates and between 1991 and 2006. About 100 % of the palms are plasma smallholder schemes) covering approximately at prime mature stage and still in the first planting 60,000 ha. PT IIS already submitted the time bound plan cycle. A replanting programme has been developed for to BSI during the initial assessment of this Muara Bulian the replanting of palm aged more than 25 years. The Group. Appendix A shows the time bound plan which age profiles of the palms are shown in Table 3a and 3b includes the smallholders. Once the palm oil mill is below. certified, expansion of the palm oil mill certificate is carried out by including the smallholders into the Table 3a: Own estate’s Age profile of palms existing certificate. Age Total Planted area % of Planted area (years) (ha) Muara Bulian Estate BSI assessment team considers the time bound plan is 21 – 30 978 55.19 challenging and still relevant to their management. 11 – 20 794 44.81 During this annual surveillance assessment and scheme 4 – 10 ‐ ‐ smallholder assessment as part of the scope expansion, 0 – 3 ‐ ‐ it is noted that some changes were made to the time Total 1,772 100.00 bound plan by bringing forward some of the assessment earlier than the original plan and one assessment was withdrawn because it was legally released on 1 may

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2014. BSI audit team found that the company comply Table 5b: Muara Bulian Mill – Approximate PK with the Time bound Plan. The details are shown in Tonnages Certified and actual production Appendix A. Muara Bulian Mill PK (Tonnes) 2013 2013 2014 BSI also assessed the requirement for partial Budget Actual Budget certification and concluded that: Muara Bulian Estate 2,689 1,968 2,533 1. There are no unresolved significant land disputes. Scheme Smallholder 8,413 7,220 8,348 2. No replacement of primary forest or loss of HCV. New Subtotal Certified 11,102 9,188 10,881 land acquisition follows the RSPO NPP process including Outgrowers* 1,932 2,910 1,437 public notification of new planting. Total 13,034 12,098 12,318 3. No labour disputes that are not being resolved * Outgrowers is excluded from certification scope. through an agreed process. 4. No evidence of noncompliance with law noted. Table 5c: Approximate Tonnages Certified during ASA2 Mill 2014 Budget 1.9 Area of Plantation CPO PK Muara Muara Bulian Estate 10,266 2,533 The area of palms at company owned estates and Bulian Scheme Smallholder 32,229 8,348 smallholders are listed in Tables 4a and 4b. Grand Total 42,495 10,881

Table 4a: Estate and Area of Palms Estate Mature (ha) Immature (ha) 1.11 Date of Certificate Issued and next surveillance Muara Bulian 1,722 0 visits Sub total 1,722 0 The scope of the certificate includes the production from Table 4b: Scheme Smallholders members and Area of the company owned estates and scheme smallholders Palms which processed at the Muara Bulian Palm Oil Mill. The reissuance date of certificate would be after the Scheme Smallholder Mature Area Number of approval of the summary report. The next surveillance (ha) members visit will be not longer than 12 month of certificate KUD Barokah 1,240 615 anniversary date. KUD Sumber 1,130 560 Makmur 2.0 ASSESSMENT PROCESS KUD Budi Sari 900 445 2.1 Certification Body KUD Makmur Rejeki 730 360

KUD Karya Lestari 710 350 BSI Group Singapore Pte Ltd KUD Tuah Sakato 2,248 1,125 1 Robinson Road Total 6,958 3,455 AIA Tower #15‐01 Singapore 048542 Phone: +65 6270 0777 1.10 Approximate Tonnages Certified Fax: +65 6270 2777 Scheme Manager: Mr Aryo Gustomo The approximate tonnages certified reported during Email: [email protected] initial certification was based on the budget for the year 2010. During this expansion of the scope, the BSI is a leading global provider of management systems approximate tonnage certified includes the production assessment and certification, with more than 60,000 from the scheme smallholder based on the budget for certified locations and clients in over 100 countries. BSI the year 2014. The detail is shown in Table 5. Standards is the UK’s National Standards Body. BSI provides independent, third‐party certification of Table 5a: Muara Bulian Mill – Approximate CPO management systems. BSI has a Regional Office in Tonnages Certified and actual production Singapore and an Office in Kuala Lumpur, Jakarta and CPO (Tonnes) Bangkok. Muara Bulian Mill 2013 2013 2014 Budget Actual Budget 2.2 Qualification of the Lead Assessor and Assessment Muara Bulian Estate 11,185 8,308 10,226 Team Scheme Smallholder 33,741 28,935 32,229 Haeruddin Tahir – Lead Assessor Subtotal Certified 44,926 37,243 42,495

Outgrowers* 6,972 10,092 4,737 Graduated from the Faculty of Forestry of Hasanuddin Total 51,898 47,335 47,232 University and has experiences in timber concession, wood industry, sales of medical equipment, and oil palm * Outgrowers is excluded from certification scope. plantation since 1995. He is experienced in international

training and auditing in Organic standard, Common Code

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Coffee of Community (4C), UTZ certified, FSC, PEFC, sampling two cooperatives (KUDs) based on the RSPO RSPO, and ISO 9001. During this assessment, sampling formula (0.8 √Y whereby Y is number of he assessed the mill, estate and smallholder legal and cooperatives). This sampling strategy was developed social isuues. based on the RSPO sample size, the geographical location of the cooperatives and number of smallholder Nanang Mualib – Assessor members. The RSPO sampling formula also used for the selection of members to be assessed. He holds a Bachelor degree in Forestry Technology from Bogor Agriculture University, 1999. He has 4 years The assessors carried out follow‐up checks on the experience worked in the Forest plantation company in effectiveness of corrective actions for the Indonesia, and has experiences involves in the several nonconformities and Observations/ Opportunities for RSPO certification audits as team member. He has Improvement that were identified during ASA1. attended the 5 days RSPO P&C Certification System Assessment Training held by PT Mutuagung Lestari on The methodology for collection of objective evidence 2009 as well as 5 days ISO 9001 auditor training on 2009. included physical site inspections, observations of tasks He has been approved as an HCV Assessor under RSPO and processes, interviews of staff, workers and their Scheme. He has been involved in many assessment families and external stakeholders, review of related to the Forestry and Sustainable oil palm documentation and monitoring data. Checklists and certification in Indonesia. He has experienced involves in questionnaires were used to guide the collection of RSPO certification assessments more than 15 oil palm information. different organizations (including mills and estates) in Indonesia. He has an excellent command of Bahasa This report is structured to provide a summary for each Indonesia and English in both writing and speaking. He is Principle and Criterion, together with details for selected also familiar with RSPO P&C Certification assessment indicators to demonstrate conformance. The assessment and qualified as audit team member. During this was based on random samples and therefore assessment, he assessed on the aspect of Legal, HCV nonconformities may exist that have not been identified. identification and management, and also Social community engagement and stakeholders consultation. Mr Aryo Gustomo, BSI RSPO Lead auditor and Internal Reviewer, has reviewed this report for conformance Pratama Agung Sedayu - Assessor with BSI Procedures and the RSPO Certification System requirements. He graduated from University of Jenderal Soedirman ‐ Indonesia on 2008, majoring in Social Economic of 2.4 Stakeholder Consultation and a List of Stakeholders Agriculture. He involved in RSPO certification since 2009 Contacted as a team member covering assessment with RSPO P&C in Indonesian and Malaysia. He completed the ISO 9001 During the onsite assessment, stakeholder consultation and OHS 18001 Lead Auditor training, HCV identification was conducted involving internal and external and management, ISPO auditor training, and has stakeholders. Meeting was held to seek feedback on the planned to attend RSPO Lead auditor endorsed course in performance of the company and scheme smallholders May 2013. He can communicate fluently in Bahasa with respect to RSPO requirements and aspects that Indonesia and English both oral and written. During this they consider need improvements. Stakeholders assessment, he assessed the estate and smallholder best included those immediately linked with the operation of practices, environment, working safety, and emergency the company such as workers, staff, smallholders, preparedness. contractors, government officials, and NGOs, whose activities covers same geographical area as the Muara This summary report was reviewed by Mr. Aryo Bulian Group. Stakeholder consultation took place in the Gustomo. He is one of the BSI RSPO Lead auditor and form of meetings, interviews and phone calls without internal reviewer who has involved in report reviewing the present of the management members of the and certification decision. company.

2.3 Assessment Methodology and Programme Based on stakeholder’s inputs, auditor team subsequently verify all relevant positive and negative The Second Annual Surveillance Assessment (ASA2) of th comments to PT IIS and scheme smallholder’s the Mills and Estates was carried out on 2 – 6 June representative. These inputs were also used for 2014. The Assessment Programme is included as consideration of audit conclusion. The summary of Appendix C. The Programme included assessments of stakeholder comment is provided in Section 3.5 of the the One Mill, One company managed Estate of Muara body of this report. The list of stakeholder contacted is Bulian, and two sampled KUDs (Barokah and Makmur included as Appendix D. Rejeki) against all of the RSPO Principles & Criteria and applicable RSPO indicators. The two sample KUDs had 2.5 Date of Next Surveillance Assessment Visit not previously been assessed. The next surveillance assessment visit would be not later BSI Audit team conducted an assessment of the scheme than 12 months from anniversary date of certificate. This smallholders operation comprising six cooperatives by

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 5 surveillance assessment will include the one certified Document review confirmed PT IIS has made response mill, one estate and the scheme smallholders which has to information request in appropriate and timely been included in the certified scope. manner. The Response of information request from relevant authorities is compiled under “Laporan Rutin” 3. ASSESSMENT FINDINGS (Routine report book). Based on the procedure SOP AA‐ Gl‐5008.1‐R1, the record of information requests and The assessment findings are reported in two parts. responses were kept for 3 years. Document review Section 3.1 is referring to the finding of the Annual confirmed all of current records are kept does not Surveillance Assessment covering the two certified mills exceed 3 years. Example: Information request from and estates. Section 3.2 is referring to the findings of the Batanghari Regency Secretariat No.800/SPT/2013 dated Scheme Smallholder annual surveillance assessment. 5th June 2013, in relation with Coordination of local government oil palm estate 85.6Ha. Subsequent follow 2 (two) major nonconformities rose against indicator up with a coordination meeting on the same date, 2.1.1 of RSPO P&C for Mill and Estate and indicator 6.2.1 attended 12 representatives from various government of RSPO P&C for Scheme Smallholder. 2 (two) minor office and PT IIS. nonconformity raised against indicator 5.3.3 of RSPO P&C for Mill and Estate, and indicator 6.10.3 of RSPO Criterion 1.2: Management documents are publicly P&C for Scheme Smallholders. Several Observation/ available, except where this is prevented by commercial Opportunity for Improvement are also highlighted. The confidentiality or where disclosure of information evidence for closing out the major nonconformities was would result in negative environmental or social verified during NCR Closure assessment. PT IIS has outcomes. submitted Corrective Action Plan for Minor nonconformities and Observation/Opportunity for PT IIS has a policy stated that all legal, social and Improvement. environmental document and permits are publicly available. The procedures for information request BSI Audit team has accepted the evidence of closing our regulated under SOP AA‐GL‐5008.1‐R1 dated 22 August major nonconformities and concluded those were closed 2011. List of available document for public is listed under out. BSI auditors have also accepted the Corrective "Daftar Perizinan" (List of Permits), covers Copies of Action Plan for minor nonconformities and will be government related documents such as AMDAL, RKL, verified during subsequent surveillance visit. The detail RPL and land ownership documents are available on of the findings during assessment is explained in the request. Other document includes Social Impact summary of findings below. Assessment, Safety and Health Plan and continuous improvement plans. These records are maintained for a BSI recommends that Muara Bulian Group to maintain minimum of three years and government related the existing certificate. documents maintained as per requirement of the law. Stakeholder information request recorded under “Logbook permintaan dan Tanggapan terhadap 3.1 Summary of Findings – Existing certified units Permintaan Informasi dari Stakeholder”. (RSPO P&C INA-NIWG, May 2008) PT IIS has put in order, a document register under Principle 1: Commitment to transparency “Master List Dokumen”. The list regulates in detail the time frame to maintain each document. For example, Criteria 1.1: Oil palm growers and millers provide the decree related to forest area release maintains adequate information to other stakeholders on period “continuous” while “Dokumen Pendaftaran LKS environmental, social and legal issues relevant to RSPO Bipartit”‐ Bi‐party body (for industrial resolution) Criteria, in appropriate languages & forms to allow for registration document will be maintained for three (3) effective participation in decision making. years. Company consistently implement the procedure related to publicly available document, retention time, PT IIS has maintained Standard Operating Procedure for information request and response were maintained for 3 handling information request and response under AA‐ years after fulfilment. GL‐5008.1‐R1 effective date 22nd August 2011. Under the procedure, the response must be provided to Principle 2: Compliance with applicable laws and stakeholder in 15 working days. The retention time for regulations information request and response records sets as 3 years. Appointed officer is responsible to receive any Criterion 2.1 – There is compliance with all applicable information request from stakeholders, both written and local, national and ratified international laws and unwritten. The officer also maintains the logbook for regulations. information request and responses. The information request from relevant authorities recorded under PT IIS maintained SOP for compliance with legal “Permintaan Informasi rutin” (Routine Information indicators and its changes under SOP AA‐GL‐5001.1‐R0 Request Book). The information request from other dated 5th December 2009. PT IIS maintained document interested parties recorded under “Permintaan “Evaluasi Kepatuhan Hukum” (Evaluation of Legal Informasi Lain” (Others Information Request Book). Compliance) dated 6th May 2014. The Legal Department

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 6 of PT IIS’s Head office issued a Memorandum for all units totalling 65,000Ha in Jambi Province for PT Inti Indosawit under PT IIS management with regards Updating Current Subur. Subsequently through “Surat keputusan Regulation. PT IIS has evaluated the changes with the Gubernur Daerah Tingkat I Jambi” ‐ Decree letter of latest regulation. A documented system has been Jambi Governor No.242 tahun 1987 dated 19th June prepared to demonstrate compliance with all applicable 1987 on “Pencadangan Tanah untuk Keperluan legal requirements, under “Bukti Pemenuhan Hukum”. Perkebunan Kelapa Sawit dengan Pola PIR Transmigrasi PT Inti Indosawit Subur di Lokasi Kecamatan Muara Any changes or amendment of regulation occurred, Bulian Kabupaten Daerah Tingkat II Batanghari dan “Hubungan masyarakat ‐ Humas” – Public relation and Lokasi Kecamatan Tungkal Ulu Kabupaten Daerah “Kepala Tatausaha ‐ KTU” – Administration Head, make Tingkat II tanjung Jabung seluas 12.000 Ha (Kabupaten evaluation accordingly. “Humas” and “KTU” is Batanghari)” – land allocation of 12,000Ha located in responsible for changes in regulation within local level, Muara Bulian and Tungkal Ulu district for oil palm while Head Office is in charge for national – level plantation with PIR‐transmigration scheme. regulation. Forest area release through “Surat Keputusan Menteri Sample of legal documents were checked in the mill and Kehutanan No.494/Kpts‐II/1991 tentang Pelepasan areal estates. Land ownership (such as land title/HGU, hutan seluas 17,500Ha terletak di Kelompok Hutan S. location permit, etc) documents are valid. Lampisi‐S. Palik‐palik Kabupaten Dati II Tanjung Jabung dan Seluas 9,356Ha terletak di Kelompok Hutan S. Boiler permits, sterilizer permits, turbine engine permits, Kehidupan‐S. Singoan Kabupaten Batanghari, Provinsi power generator permits and lightning arrester permit Jambi untuk Usaha Budidaya perkebunan dengan pola found to be tested and valid. Test for generator emission PIR‐TRANS atas nama PT Inti Indosawit Subur” dated 7th and ambient air quality and the latest report confirm August 1991. compliance to the legal requirements. PT IIS demonstrate a valid land ownership covering: PT IIS has carried out compliance evaluation against applicable legal requirement including evaluation of 1. “Surat Keputusan Kepala BPN Pusat No. 14/HGU/1992 every chapter, the fulfilment level and evidence of tentang Pemberian HGU atas nama PT Inti Indosawit compliance. For example the compliance evaluation Subur seluas 1.256,18 Ha” dated 15th September 1992. against “Undang‐Undang No.5 Tahun 1960 tentang Subsequently issued certificate HGU No. I Tahun 2003 Pokok Agraria”, “Undang‐Undang No.18 Tahun 2004 dated 3rd December 2003 based on “Surat Ukur No. tentang Perkebunan”, “Peraturan Daerah Kabupaten 01/Msi/2003 terletak di Desa Singoan, Kecamatan Batanghari No.2 Tahun 2011 tentang Izin Usaha Muara Bulian, Kabupaten Batanghari”, valid until 31st Perkebunan”, “Peraturan Pemerintah No.27 Tahun 2012 December 2027. tentang Izin Lingkungan”, “Peraturan Pemerintah” No.18 Tahun 1999 tentang Pengelolaan Limbah B3”, etc. 2. “Surat Keputusan Kepala BPN Pusat No.51/HGU/BPN/2003 tentang Pemberian HGU atas Legal requirement‐evaluation and fulfilment mechanism tanah terletak di Kabupaten Batanghari, Provinsi Jambi regulated under “SOP Pemenuhan Peraturan Perundang‐ seluas 523.42 Ha” dated 10th September 2003. undangan dan Perubahannya” (No. SOP; AA‐GL‐5001.1‐ Subsequently issued HGU certificate No.4 Tahun 2003 RO) dated 5th December 2009. The procedure explains dated 3rd September 2003 based on “Surat ukur No. the stages for evaluation applicable legal requirements, 56/BSa/2003 terletak di Desa Bukit Sari, Kecamatan person in charge for evaluation and ensures Pamayung, Kabupaten Batanghari” valid until 6th implementation of such requirement. October 2038.

However, Audit team found a number of legal 3. “Surat Keputusan Kepala BPN Provinsi Jambi No.03‐ requirements have not been complied: 540.1‐06‐2003 tentang Pemberian HGU atas nama PT 1. Provision of social insurance (including accident Inti Indosawit Subur atas tanah terletak di Kabupaten insurance) for temporary worker - "Pekerja Harian Batanghari, Provinsi Jambi seluas 32,48 Ha” dated 10th Lepas" in Afdeling I; July 2003. Subsequently issued certificate HGU No.2 2. Provision of first aider license in Muara Bulian Estate Tahun 2003 dated 12th August 2003 based on “Surat and Palm Oil Mill (Major NC raised under 2.1.1). ukur No.2/BuJ/2003 terletak di Desa Bulian Jaya, Kecamatan Muara Bulian, Kabupaten Batanghari”, valid up to 13th August 2038. Criterion 2.2 – The right to use the land can be demonstrated and is not legitimately contested by local 4. “Surat Keputusan Kepala BPN Provinsi Jambi No. 02‐ communities with demonstrable rights. 540.1‐06‐2003 tentang Pemberian HGU atas nama PT Inti Indosawit Subur atas tanah terletak di Kabupaten Legally, the land ownership gained by PT IIS through Batanghari, Provinsi Jambi seluas 17,09 Ha” dated 10th Surat Persetujuan Menteri Pertanian – Minister of July 2003. Subsequently issued certificate HGU No.2 Agriculture Approval Letter Tahun 2003 dated 12th August 2003 based on “Surat No.KB.320/859/Mentan/XI/1983 dated 7th November ukur No.1/BuJ/2003 terletak di Desa Bulian Jaya, 1983 on Principal Approval Oil Palm Development

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Kecamatan Muara Bulian, Kabupaten Batanghari” valid October 1991 signed on by Batanghari Regency until 13th August 2038. Secretary and witnessed by village head, camat ‐‐ district head, community leader and relevant government office 5. “Surat Keputusan Kepala BPN Provinsi Jambi No.01‐ (Plantation office ‐ Batanghari regency, Law bureau – 540.1‐06‐2003 tentang Pemberian HGU atas nama PT Batanghari Regency, Economic office – Batanghari Inti Indosawit Subur atas tanah terletak di Kabupaten Regency, Land office – Batanghari Regency). Batanghari, Provinsi Jambi seluas 27,27 Ha” dated 10th July 2003 subsequently issued certificate HGU No. 1 Based on the agreement, “Surat Penyerahan Hak atas Tahun 2003 dated 12th August 2003 based on “Surat Tanah dan Pelaksanaan ganti rugi lahan”‐ Handing of ukur No. 55/BSa/2003 terletak di Desa Bukit Sari, land right and compensation paid for Mr. Id, from Kecamatan Pemayung, Kabupaten Batanghari”, valid Malapari village. Mr. Id compensated Rp.200,000 for until 13th August 2038. 6Ha land and joined into local transmigration, in line with agreement dated 21st October 1991. PT IIS has demonstrated boundary maintenance every 6 months, documented within “Laporan Pemeriksaan dan PT IIS’s Muara Bulian group has not acquired any new Perawatan Patok Batas”. The latest check carried out on land since the previous assessment (ASA1). PT IIS’s 23rd December 2013 for 49 units of boundary poles. Muara Bulian does not restrict local peoples’ access through the main Estate roads. This was confirmed BSI verifies the information request book, and found no during interview with company representative and complaint filed related to conflict. Based on interview stakeholder consultation with local community. Based with Bulian Jaya village head and Mukti Jaya village on interview with stakeholders, stating there is no land head, stating there is no land conflict between conflict between communities and PT IIS noted. In communities and PT IIS noted. In addition, records of addition, records of compensation resolution during compensation resolution during estate development estate development made available. Furthermore, it is made available. For instance: also stated currently no traditional right within area of PT IIS – Muara Bulian. Agreement based on Minutes of meeting for Payment upon Plantation Compensation of Pasar Terusan, Principle 3: Commitment to long-term economic and Malapari and Muara Singoan tanggal 21st October 1991 financial viability signed on by Batanghari Regency Secretary and witnessed by village head, camat ‐‐ district head, Criterion 3.1: There is an implemented management community leader and relevant government office plan that aims to achieve long-term economic and (Plantation office ‐ Batanghari regency, Law bureau – financial viability. Batanghari Regency, Economic office – Batanghari Regency, Land office – Batanghari Regency). PT IIS’s Muara Bulian has 3 Year working plan for Productivity per planting year of the estate, under Based on the agreement, compensation paid for Mr. Id, “Rencana Kerja 3 tahunan, Pengelolaan Minimum 3 from Malapari village. Mr. Id compensated Rp.200,000 tahun Kebun Muara Bulian”. The plan indicates the for 6Ha land and joined into local transmigration, in line target for 2014 (current), as well as 2015, 2016 and with agreement dated 21st October 1991. 2017. The estimation based on actual production realization from 2011, 2012, 2013 and actual as of April PT IIS made available the SOP No.AA‐GL‐5003.1‐RI for 2014. The estimation including OER average, KER land conflict, approved by management on 5th December average, Production cost (Rupiah/tonne CPO) divided 2009 and first revision on 22nd August 2011. The between estate cost and mill cost. procedure contains flowchart and mechanism forconflict resolution. This conflict resolution mechanism has been The Estimate productivity for the year 2014 with communicated to relevant parties within stakeholder consideration of mature planted area is 27.15 meeting dated 27th June 2011, attended by 43 tonnes/Ha. The costs comprise of upkeep activities (such participants. as weed control, fertilizer application, pest and disease management, pruning and castration, oil palm census Criterion 2.3 – Use of the land for oil palm does not and thinning out, ditch/terrace/platform maintenance, diminish the legal rights of other users without their road and bridge maintenance, survey and maintenance free, prior and informed consent. of boundary poles) and Harvesting cost (harvesting, transport and weighing). PT IIS – Muara Bulian was developed in parallel with Replanting programme is available, commencing in 2016 government program PIR‐Trans back in 1991. Based on (725 Ha) and continues in 2017 (49 Ha). The replanting document verification and interview with local programme is prepare by the estate managers as government stakeholders, stating the whole area of PT guidance to implement replanting work such as felling, IIS – Muara Bulian has been compensated against chipping, terracing, cover crop planting, planting of traditional rights bear within. Copies of negotiation palms and maintenance up to maturity stages. The zero under Agreement based on Minutes of meeting for burning technique during replanting was communicated Payment upon Plantation Compensation of Pasar st to all executives in the plantation as part of replanting Terusan, Malapari and Muara Singoan tanggal 21

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 8 program. Seed are from company’s own research station Result of annual leaf sampling test made available for (Topaz Oil Palm Research Station). fertilizer application recommendation. The latest leaf sampling conducted in 2013 for fertilizer (organic or Yearly review of replanting programme is available for inorganic) recommendation on 2014. Result of soil 2014. The review result showed replanting sampling analysis (physic and chemical) made available postponement up to 2016, and general process to with recent dated May 2009. Another soil fertility prepare the re‐planting program such as survey and field analysis reported under “Hasil Analisa Tanah Kebun block boundary, stacking methods, ganoderma census, Plasma Muara Bulian” from sample taken 22 July 2013. culvert and road marking, felling, chipping and stacking, hoeing, planting spot marking, making platform, planting Fertilizer application carried out as per recommendation leguminous crop planting, making planting hole, and from R&D and leaf analysis. PT IIS Muara Bulian planting procedures. implements land application and Empty Fruit Bunches (EFB) for area with low natural fertility. PT IIS Muara Principle 4: Use of appropriate best practices by Bulian Estate presented under “Rekomendasi growers and millers Pemupukan Kelapa Sawit 2014”. Record of fertilizer application including POME for land application and EFB Criterion 4.1: Operating procedures are appropriately for land mulching is recorded in “Program dan realisasi documented and consistently implemented and pemupukan 2014”. monitored.

Estate is using Agronomy Policy Manual dated 1 Criterion 4.3: Practices minimise and control erosion February 2009 as guidance for good agriculture practise. and degradation of soils. SOPs related to all the estate operations such as nursery, land preparation, planting, field maintenance, PT IIS developed semi‐detailed soil map for Muara Bulian harvesting, FFB collection and transport are referred to Estate. PT IIS Muara Bulian shows Semi Detail Soil Map the manual. The SOPs cover all aspects of oil palm scale 1:25,000. The semi detail soil map indicating the management from land development through to slope class, topographic map and soil series identified in maintenance and harvesting. The implementation of the plantation. Soil map made available with the soil field practices is checked daily by the Assistant Managers type and topographic class. Based on the soil map the and the Estate Manager and monthly by the General larger part of the estate were Dystrudepts composed of Manager. clay with sandy particle. No peat soil is identified.

Palm Oil Mill has a separate manual which includes SOPs PT IIS developed strategy to minimize erosion on slope for each processing stations covering 16 sections from areas. Record shows manual terracing, mechanical receiving of FFB, grading, processing, lab analysis, terracing and platform has been built and re‐instated on storage and despatch. The mill revised Policy Manual areas with steep slope of block A92a. Field inspection to was dated 26 August 2011. Two new SOPs were block A92a shows the platform and manual terracing incorporated during the revise to include the supply evident. Control of erosion demonstrated minimum chain requirement on traceability, Mass Balance and impact on soil degradation and sedimentation on the quarterly report. low‐lying land.

Implementations of the SOPs are monitored trough field Road maintenance programme made available inspection by the estate assistant managers, completed with road maintenance realization. Record of Agronomist, Plantation advisers, mill adviser and by “Realisasi Prasarana Jalan tahun 2014” (Realization on RSPO internal audits. PA visit report dated 17‐20 March the Road facility year 2014) consisted installation of 2014 No.KMB/VA/FULL 01‐14 was checked and found permanent cross drainage, road hardening block A92c that all the field operations are covered and monitored and A92d programmed 2,583 meters, required 232 m3 during the visit. Another report presented was Laporan sand‐rock aggregate and 542 m3 laterite. Actual road Operasional Audit PT Inti Indosawit Subur‐KMB No.OA‐ maintained as at March 2014 is 3,833 meters. Field visit 12‐VI‐Plt.II‐est.017. Corrective action plans are prepared to block A92c, A92d and B91b shows the road for any findings and it is checked during the subsequent maintenance evident. visits. Estate and mill carry out daily monitoring through field inspection records and mill inspection records. It is a routine that the estate and mill management prepare Criterion 4.4: Practices maintain the quality and monthly reports and send to the company’s head office availability of surface and groundwater. for monitoring purpose as well. All field inspection results are recorded in Monthly Report. PT IIS Muara Bulian presented document entitled Conservation Management Plan PT Inti Indosawit Subur Muara Bulian. The document explains the plan for Criterion 4.2: Practices maintain soil fertility at, or riparian conservation and other HCV area. The riparian where possible improve soil fertility, to a level that buffer zones for re‐establishment at replanting were ensures optimal and sustained yield. clearly marked with poles painted red and the adjacent palms marked with yellow paint. Inspections showed the

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 9 vegetation appeared within riparian area are well There is no pesticide usage noted during this protected from disturbance. assessment. Agrochemical used mainly is herbicide for the circle and selective weed controls. PT IIS Muara PT IIS Muara Bulian demonstrates a set of record for Bulian maintains records of herbicide use in 2013‐2014. water conservation programme implementation. “Program Restorasi Riparian Group Muara Bulian for Sungai Singoan and anak Sungai Singoan 2014” where Criterion 4.6: Agrochemicals are used in a way that the conservation officer planted Vertiver grass (Vetiveria does not endanger health or the environment. There is zizanoides), native species such as Sungkai (Pheronema no prophylactic use of pesticides, except in specific canescen), Ketapang and Bamboo seedlings. PT IIS situations identified in national Best Practice Muara Bulian presented a Memorandum guidelines. Where agrochemicals are used that are No.05/Plt.III/KMB‐Group/2011 dated 31 March 2011 categorised as World Health Organisation Type 1A or related to cease of agrochemical application in protected 1B, or are listed by the Stockholm or Rotterdam area effective 1 April 2011. Conventions, growers are actively seeking to identify alternatives and this is documented. The Mills sample and test water quality of river water, domestic water, and monitoring well. The independent Inspection of records confirmed only chemicals that are Laboratory collects samples and tests the raw water of registered and approved by the Department of river and monitoring well 6 monthly for compliance. Agriculture are used. Data on pesticides usage are Domestic water was tested internally through Mills recorded on the PT IIS’s Muara Bulian Group Estate laboratory in monthly basis. Review of the results for the office. previous year confirmed both Mills complied with all parameters. Agrochemicals used are monitored each time it is used. Records includes active ingredients used, area treated, The BOD of the treated Mill effluent discharge was quantity applied per hectare, type of equipment used maintained consistently less than 5,000 mg/L and number of applicators involve. throughout 2012. The independent Laboratory (UPTB Provinsi Jambi) collects samples and tests the effluent PT IIS Muara Bulian control weeds through identification discharge monthly for compliance. Review of the results to select appropriate control to be applied. Identification for the previous year confirmed both Mills complied record of weeds comes under “Identifikasi Gulma with all effluent discharge licence parameters Dominan”. The record is identifying the target of weeds, (KepmenLH No. 28 with regards to BOD limits of effluent the location, and active ingredient. Dosage used for discharge for land application). herbicide application refers to Agricultural Policy Manual AA‐APM‐OP‐1100.08‐R1. To ensure that applicators are Both mills monitor the use of water includes monitoring trained, all personnel handling agrochemical was trained of water usage for mill processing and domestic usage. with limited pesticide training in collaboration with Result of water usage monitoring is recorded under “Mill Manpower office of Batanghari regency. Record of Operation Summary 2014”. Review on record confirmed training for spraying operators is kept in estate office. met with the approved budget for processing and Field visit to Muara Bulian estate chemical’s storage domestic. showed the pesticide stores continued to be well maintained and the chemicals were labelled clearly and stored within spill containment. Observation of spray‐ Criterion 4.5: Pests, diseases, weeds and invasive mix preparation and spraying showed that the workers introduced species are effectively managed using were wearing PPE correctly and they were working appropriate Integrated Pest Management (IPM) safely and in accordance with the chemical techniques. manufacturer’s recommendations.

PT IIS’s Muara Bulian continued the program at each of Based on procedure SOP AA‐KL‐06‐EFP R4 Penanganan the Estates of establishing the beneficial plants Turnera Limbah B3 dated 1 November 2008, all agrochemical subulata and Cassia cobanensis along boundaries and waste material and container are collected and stored at roadsides. Barn Owl boxes have been installed at each of hazardous waste storage. The hazardous waste storage the Estates with routine census conducted every 3 holds valid permit at present. Triple rinse and punch‐a‐ month. hole method is used before storing the empty containers in the B3 store. The waste material are transported Muara Bulian Estate operates an early warning census within 180 days limit, as regulated in the permit.These programme to monitor leaf‐eating pest numbers and rat containers are recycled for the same purpose to prepare damage. The census monitors numbers of nettle pre‐mixed agrochemical to be used in the field. The caterpillars, bagworm pests and rats at the Estates. The surplus waste materials are disposed through permitted most recent census was done on January‐February 2014. waste collector PT Emulson Indo Nusa Indah.

Latest IPM training for field operator was conducted on Health check up conducted on 6 monthly basis. The 15th April 2013. latest medical checkup for sprayer and fertilizer operator conducted on 26th March 2014.

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Principle 5: Environmental responsibility and Company policy on prohibiting pregnant or breast conservation of natural resources and biodiversity feeding female workers from agrochemical application is implemented continuously Based on interview with Criterion 5.1: Aspects of plantation and mill female worker and paramedic in clinic, regular management, including replanting, that have pregnancy test was conducted in order to monitor the environmental impacts are identified and plans to fertility. Female worker with indication of pregnancy is mitigate the negative impacts and promote the positive not allowed to work with agrochemical. ones are made, implemented and monitored to demonstrate continuous improvement. Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and PT IIS demonstrate Analisis Mengenai Dampak implemented. Lingkungan (AMDAL) consist of document ANDAL, RKL and RPL as approved through “Persetujuan Komisi Mill and estate in PT IIS Muara Bulian made reference Amdal Departemen Pertanian No. 014/Andal/RKL‐ for OHS implementation to company policy and RPL/BA/V/1995 tentang Persetujuan ANDAL dan RKL‐RPL “Program Manajemen K3 KMB” (consist of OHS Plan, perkebunan Kelapa Sawit dan Pabrik Minyak Kelapa training programme and action plans with designated Sawit PT Inti Indosawit Subur” dated 3rd May 1995. The responsible person identified in term of P2K3 (Safety and document covers scope of areal of 32,000 Ha consist of Health Committee)). Field inspection to the mill confirms Kuala Tungkal Estate 20,000Ha and Muara Bulian Estate the OHS policies have been implemented, such as use of 12,000Ha and palm oil mill capacity 90 Tonnes FFB/hour PPE for workers, routine medical checkup, emergency for Kuala Tungkal and 30 Tonnes FFB/hour for Muara response procedure, monitoring of work accident, etc. Bulian.

Mill and Estate in PT IIS Muara Bulian designated PT IIS ‐ Muara Bulian reports twice a year to Government responsible person for OHS programme is identified on the RKL&RPL monitoring program results and the under P2K3 committee approved by Manpower office of most recent RKL & RPL report was July – December Batanghari regency. The monthly meeting for health and 2013. The RKL/RPL covers all the operating units safety comes under “Rapat P2K3”. Latest meeting including the scheme smallholders. Based on interview recorded 28th May 2014 for mill and estate. with village heads, community is involved in the environment management, especially social aspect PT IIS Muara Bulian Mill and Estate workers are covered through coordination meeting quarterly including by work accident insurance (JAMSOSTEK). Document Plantation office from Batanghari Regency. review on the worker’s payroll, all workers in the Mills and Estates are covered by accident and medical Revision on AMDAL document is available for PT IIS ‐ insurances under JAMSOSTEK as per May 2014. Muara Bulian through “Surat Persetujuan Kepala Badan Lingkungan Hidup Provinsi Jambi No. 474/BLHD/2010 PT IIS Muara Bulian Mill and Estate provided a tentang Persetujuan Revisi Rencana Pengelolaan documented risk assessment in term of HIRADC. Latest Lingkungan Hidup (RKL) dan Rencana Pemantauan review of HIRADC was on 16th December 2013. All Lingkungan Hidup (RPL) PT Inti Indosawit Subur seluas activities along with potential hazards and risks have 9.188 Ha dan Pabrik Minyak Kelapa Sawit Kapasitas 60 been assessed and identified. Ton/Jam di Kecamatan Maro Sebo Ilir, Kabupaten Batanghari, Provinsi Jambi” dated 10th August 2010. The OHS training programme is developed under Training revision occurs due to changes in mill capacity from 30 Programme of Environmental and Sustainability, PT IIS Tonnes FFB/hour into 60 Tonnes FFB/hour, land Muara Bulian Group. There was training for first aider application separation from Tungkal Ulu Group and and fire fighting. social dynamics back in 2010.

Criterion 5.2: The status of rare, threatened or Criterion 4.8: All staff, workers, smallholders and endangered species and high conservation value contractors are appropriately trained. habitats if any, that exist in the plantation or that could be affected by plantation or mill management, shall be PT IIS developed Training programme of Environmental identified and their conservation taken into account in & Sustainability 2014. While for training programme of management plans and operations. 2013, PT IIS made the record available. Example: Fire drill simulation dated 26 July 2013, worker and PT IIS – Muara Bulian has carried out Initial HCV emergency team participating assessment by RSPO’s HCV approved assessor from Agriculture University of Bogor, Indonesia on October Mill, estate and smallholder scheme manager maintain 2011. The presence of HCVs at PT IIS Muara Bulian is all the training records and this was checked and verified mainly under category HCV 1.1, HCV 1.2, HCV 4.1 and through interview with the staff, workers, smallholders HCV 5 with total HCV areas of 76.18Ha; where mostly and contractors interview. the identified HCV areas were determined as riparian area and protected area. The HCV report has been peer

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 11 reviewed by WWF (Mr. Deni Rahadian) on 23rd Hazardous waste (B3) such as used lubricant and filters, September 2011. old battery, clinical waste (sharp and infectious waste), empty chemical container and light bulbs are stored in a Based on field visit, PT IIS – Muara Bulian demonstrate dedicated permitted hazardous waste store. The efforts to protect rare species and its habitat through hazardous waste, then dispose off through licensed planting of wooden tree, HCV area patrol, flora and transport contractor not later than 180 days, in fauna monitoring. The Estates have maintained notice‐ accordance to product label and existing boards at the entrance to the properties and next to regulation/license. However, a minor NC raised. buffer zones or worker housing to prohibit the capture Document seen: or hunting of fauna and disturbance of vegetation. Interview of Smallholders confirmed that PT IIS Muara 1. “Keputusan Kepala Kantor Lingkungan Hidup Bulian had carried out awareness on HCVs and the Kabupaten Batang Hari No.17 tahun 2011 tentang farmers were able to list the protected species of birds Izin Sementara Penyimpanan Sementara Limbah B3 and mammals in the local area. di PT Inti Indosawit Subur – Muara Bulian”, valid for three years since 1st August 2011. The permit covers PT IIS – Muara Bulian created posters listing all used lubricants, oil filter, old battery, empty protected flora and fauna, endangered and threatened container, old light bulbs, expired chemicals and species and placed on location accessible to public such clinic waste. as Estate offices, worker housing, village offices as well 2. “Rekomendasi Pengangkutan Limbah B3” – as entrance way to plantation area. Recommendation of hazardous waste transportation from Kementerian Lingkungan Hidup to Dirjen Company has appointed dedicated – trained personnel, Perhubungan Darat Kementerian Perhubungan RI Mr. Suhendra as person in charge for HCV management No.B‐2106/Dep.IV/LH/PDAL/02/2014 for PT as specified under Manager Memorandum KLM/KMP Elmusonsetindo Nusaindah dated 28th February No.001/MUT‐KMB/VI/2011 dated 30 June 2011. 2014, valid for five (5) years. Inspections of records confirmed that the appointed 3. “Berita Acara Pengambilan Limbah B3 dari PT IIS personnel at each of the Estates have continued to Muara Bulian” – Minutes dated 5th May 2014 for 7 monitor the riparian buffer zones and graveyard. Plan drums of used oil, 20 pieces old battery, 18 drums for 2014 to monitor and maintain the identified HCV empty agrochemical container, 1 drum filters and area at the estate was also sighted and kept in Estate contaminated goods. manager office. 4. Hazardous waste manifest No.CA0014723 for transporting of 7.50 drums of used oil to PT Criterion 5.3: Waste is reduced recycled, re-used and Elmusonsetindo Nusaindah dated 5th May 2014; disposed of in an environmentally and socially Hazardous waste manifest No.CA0014725 for responsible manner. transporting of 1.50 drum of contaminated goods to PT Indocement Tunggal Prakasa dated 5th May 2014; Waste and pollution sources have been identified and Hazardous waste manifest No.CA0014735 for documented, including used lubricant and filter, old transporting of 22 pieces old battery to PT battery, used laboratory chemical, clinical/medical Muhtomas dated 5th May 2014; Hazardous waste waste, mill effluent, EFB, smoke, dust, fiber and shell, manifest No.CA0014736 for transporting of 19.25 empty agrochemical container, boiler ash, scrap iron, drum empty agrochemical packaging to PT used tires, waste water and domestic household refuse. Indocement Tunggal Prakasa dated 5th May 2014; . Record of identification was presented in “Evaluasi Aspek Dampak Lingkungan” EMS‐431‐003‐LT issued 1st However, In the storage of hazardous waste was not in January 2014. . line with applicable regulation. It was found medical waste (sharp edges, infectious waste, etc) stored in There is a mechanism “Mekanisme Penanganan Sampah hazardous waste storage since January 2013 - for over Domestik” to segregate organic and an‐organic waste, than 1 year; while the maximum storage time frame further to re‐use or re‐cycle an‐organic domestic waste permitted by license is 90 days + 90 days (180 days) – (such as plastic) and composting the organic domestic Minor NC was raised under 5.3.3 waste. Socialization of this mechanism takes place in 24th December 2012. Criterion 5.4: Efficiency of energy use and use of renewable energy is maximised. Document seen: Surat Perjanjian Kerja No.001/SPK/KMB/I/2013 between PT IIS Muara Bulian All energy used in both mills is monitored and recorded and Sholikun, domestic waste collector dated 15th under document of “Pemakaian Energi 2014” (The January 2013. The agreement is covering the collection Energy Usage 2014). Fossil fuel records are maintained of plastic waste, plastic container (non‐hazardous and trends shown. Energy use records include accurate waste), scrap metal from domestic refuse, card boxes. measurements of renewable energy use per tonne of “Tanda Terima Barang Bekas dari PT IIS Muara Bulian” FFB processed. Company already maximise the dated 24 May 2014, for collection of milk can 16 kg, tin renewable energy use. All the shell and fibre is can 8 kg, card boxes 11 kg, bottle 14 kg, plastic 19 kg.. consumed internally as boiler fuel.

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PT IIS – Muara Bulian has also recorded the use of fossil a. Relation between company and its stakeholders in fuel for operational purpose, including the efficiency terms of social economic interaction; analysis. Recorded in Monthly report 2014: shows b. Perception, hopes and ideal captured from local January (3,598 litres), February (3,282 litres), March community to company; 2014 (3,928 litres) and April 2014 (3,596 litres). c. Land ownership; d. Social and economic activity required by local Criterion 5.5: Use of fire for waste disposal and for community. preparing land for replanting is avoided except in specific situation, as identified in the ASEAN guidelines Within chapter IV, the impact of PT IIS – Muara Bulian or other regional best practice. existence to scheme smallholder and surrounding community were discussed, both positive and negative PT IIS Muara Bulian has continuously implemented a side. Zero Burn Policy since the beginning of oil palm PT IIS ‐ Muara Bulian reports twice a year to Government development. Although replanting has not yet been on the RKL&RPL monitoring program results and the carried out, PT IIS Muara Bulian has stated its most recent RKL & RPL report was July – December commitment to adhere to the Zero Burn Policy during 2013. The RKL/RPL covers all the operating units future replant. including the scheme smallholders. Based on interview with village heads, community is involved in the PT IIS has procedure on “Pengendalian kebakaran lahan” environment management, especially social aspect (Land Burning Control) AA‐KL‐14‐EFP. The person through coordination meeting quarterly including responsible for each working unit has been appointed. Plantation office from Batanghari Regency. Patrol conducted on holiday to monitor any activities on the field during the time including fire. Based on patrol Revision on AMDAL document is available for PT IIS ‐ report, the latest patrol conducted on May 2014. Muara Bulian through “Surat Persetujuan Kepala Badan Lingkungan Hidup Provinsi Jambi No. 474/BLHD/2010 Criterion 5.6: Plans to reduce pollution and emissions, tentang Persetujuan Revisi Rencana Pengelolaan including greenhouse gases are developed, Lingkungan Hidup (RKL) dan Rencana Pemantauan implemented and monitored. Lingkungan Hidup (RPL) PT Inti Indosawit Subur seluas 9.188 Ha dan Pabrik Minyak Kelapa Sawit Kapasitas 60 PT IIS ‐ Muara Bulian has documented all pollution and Ton/Jam di Kecamatan Maro Sebo Ilir, Kabupaten emission sources under document of Environmental Batanghari, Provinsi Jambi” dated 10th August 2010. The Aspects and Impacts Register – 14001 EMS, latest revision occurs due to changes in mill capacity from 30 update on December 2013. Tonnes FFB/hour into 60 Tonnes FFB/hour, land application separation from Tungkal Ulu Group and The boiler and generator emission tests conducted every social dynamics back in 2010. 6 month, in collaboration with Sucofindo Laboratory of Pekan baru. The results on 14th July 2013 show Interview with local villagers and head of village in Desa compliances to allowable limits (e.g. NOx, SOx, Opacity, Bulian Jaya and Desa Karya Mukti stated local and particulate). The indoor noise and air ambient at the community was invited to participates in social impact mills were also tested and comply with allowable limits. management, through coordination meeting – once The last results for 2013 (semester 2) are still hold by the every quarter with Plantation office from Batanghari laboratory and has not been given to the PT IIS. Regency, village head and camat – district head.

All environmental parameter tests for air pollution and Criterion 6.2: There are open and transparent methods emission was compiled in the RKL‐RPL report and for communication and consultation between growers submitted to Environmental agency of Batanghari. and/or millers, local communities and other affected or interested parties. Principle 6: Responsible consideration of employees and of individuals and communities affected by growers Company has developed a communication procedure and mills under “Mekanisme Penanganan Permintaan Informasi Stakeholder “(No. SOP; AA‐GL‐5008.1‐R1) dated 22nd Criterion 6.1: Aspects of plantation and mill August 2011, which explains the company responses management, including replanting, that have social against all information request sent by stakeholders impacts are identified in a participatory way and plans including response time of 14 working days after to mitigate the negative impacts and promote the information request accepted. positive ones are made, implemented and monitored, to demonstrate continuous improvement. Records of communications and consultations are available recorded under “Log Book Permintaan” (Log PT IIS ‐ Muara Bulian has developed Social Impact Book Request). During 2012, only three request received Assessment in coordination with Faculty of Forestry community’s villages by PT IIS Muara Bulian from from Bogor Agriculture University (IPB) in 2011. The community’s villages, and all were responded in timely focus of assessment covers: manner. No outstanding issues were highlighted.

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Stakeholder lists are available and are up dated covers stakeholders to express their views through their own international stakeholders, national stakeholders, representative institutions. provincial stakeholders, Regency – level stakeholders, District – level stakeholders, and local community and Mechanism to identify and calculate fair compensation surrounding 29. The stakeholders comprise of local and or loss of legal or costumary rights to land set out in the provincial governments, contractor, and NGOs. Minutes standard operating procedure (SOP) No. AA‐GL‐5003‐1‐ of meeting with stakeholders, record of request and R1 on Land Conflict adiopted by management on 5th action taken is recorded. December 2009 and has undergone first revisions on 22nd August 2011. The mechanism described is similar to PT IIS – Muara Bulian has appointed Mr. Lindu conflict resolution procedures involving community Simatupang, Public relation based on Transfer Letter representatives and others stakeholders. Regional Head Plt 3 No.003/RO3‐MEMO/HRD‐ th JBI/TL/I/2011 dated 11 January 2011 as officer There is no negotiation/compensation payment responsible to communicate and consultation with local currently. PT IIS has settled all land compensation since community and stakeholders. 1991 ath the beginning of land preparation process. The Company has made the completion of land compensation to all the working area as recorded into Criterion 6.3: There is a mutually agreed and the document "Implementation of land compensation" documented system for dealing with complaints and back in 1991, such land in the name of Mr.Id from grievances, which is implemented and accepted by all Malapari village having land area of 6Ha and parties. compensated of Rp.200,000 and the participation in Local Transmigration scheme as recorded to the Company has established a mechanism to handle agreement dated 21st October 1991 and comes with a complaint from external party, as written in “Mekanisme Letter of Submission of Land Rights. Penanganan Keluhan” – complaint handling mechanism (Doc. No.SOP AA‐GL‐5005‐RO 01) while complaint from There is no negotiation/compensation payment internal regulated under “Mekanisme Penyampaian currently. Negotiation document and/or compensation Keluhan dan Penyelesaian Keluhan Karyawan” – agreement from early stage of oil palm development is Employee’ complaint and resolution mechanism (Doc. available. Agreement based on Minutes of meeting for No.SOP‐AA‐HR‐3008‐RO 05). These mechanisms has Payment upon Plantation Compensation of Pasar been communicated to external parties and Terusan, Malapari and Muara Singoan tanggal 21st disseminated to PT IIS employees. Based on interview October 1991 signed on by Batanghari Regency with Bulian Jaya village head, Karya Mukti village head, Secretary and witnessed by village head, camat ‐‐ district Gender committee leader and worker union leader; they head, community leader and relevant government office understood the procedure and mechanism to (Plantation office ‐ Batanghari regency, Law bureau – communicating complaint and/or grievance to company. Batanghari Regency, Economic office – Batanghari Regency, Land office – Batanghari Regency). All records of grievance from external party available under “Logbook Surat Keluar dan Logbook Surat Masuk”. However there is no complaint and/or grievance noted Criterion 6.5: Pay and conditions for employees and for during period of 2013 – May 2014. employees of contractors always meet at least legal or industry minimum standards and are sufficient to Mechanism to identify and calculate fair compensation provide decent living wages. or loss of legal or costumary rights to land set out in the standard operating procedure (SOP) No. AA‐GL‐5003‐1‐ PT IIS ‐ Muara Bulian has implemented the latest decree R1 on Land Conflict adiopted by management on 5 “Keputusan Gubernur Jambi December 2009 and has undergone first revisions on 22 No.620/Kep.Gub/Dissosnakertrans/2013 tentang August 2011. The mechanism described is similar to Penetapan Upah Minimum Provinsi (UMP) Jambi tahun conflict resolution procedures involving community 2014” dated 23rd October 2013 as a reference in representatives and others stakeholders. determining the minimum wage. The minimum wage for Jambi Province is Rp.1.502.230 per month. While for Complaint procedure for external and internal permanent worker the salary based on collective stakeholders includes flow chart of the procedure and agreement between “Badan Kerjasama Perusahaan this is displayed at all the notice board and has been Perkebunan Sumatera (BKS‐PPS)“ ‐ Plantation company informed to stakeholders. Complaint book available and in Sumatera with “Pengurus Daerah Federasi Serikat records of all the complaints with updated action taken Pekerja Pertanian dan Perkebunan Serikat Pekerja is recorded in Log Book Requests. Seluruh Indonesia (PD FSP.PP‐SPSI) Propinsi Jambi” – Worker union federation for agriculture and plantation Criterion 6.4: Any negotiations concerning sector, Jambi. The collective agreement dated 4th compensation for loss of legal or customary rights are December 2013, stating the lowest permanent worker dealt with through a documented system that enables 2014 is Rp.1.540.000 per month. indigenous peoples, local communities and other

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Permanent‐monthly worker; Based on verification company supports the existence of worker union. against salary payment slip SKU under name Mr.En, Mr. Furthermore company has established LKS Bipartit as a Ad and Mr. Sut in period of January 2014, shows mean to resolve any industrial dispute between company has implemented the minimum wage of company and employees. Rp.1.540.000. Each worker received Rp.1.591.354. The worker union in PT IIS ‐ Muara Bulian is “Serikat Temporary‐daily worker; Based on verification against Pekerja Seluruh Indonesia (SPSI)” as part of “Federasi salary payment slip of fertilizer applicator under name Serikat Pekerja Pertanian dan Perkebunan‐Serikat Mrs.Sum, Mrs. Sun and Mrs. Fit in period of January and Pekerja Seluruh Indonesia (FSP.PP‐SPSI)” established April 2014, shows company has implemented the through “Surat Keputusan Pengurus Cabang FFP.PP‐SPSI minimum wage of Rp.60.090 per manday with additional Kabupaten Batanghari No. 02/PC F.SPPP‐ premium Rp.2.000 in line with minimum wage of SPSI/Batanghari/IV/2011 tentang Pengesahan Komposisi Rp.60.090 per manday. dan Personalia PUK F.SPPP‐SPSI PT Inti Indosawit Subur masa bakti 2011 – 2016” dated 16th April 2011. Further, PT IIS – Muara Bulian and the worker union agreed to PUK SPPP.SPSI PT Inti Indosawit Subur – Muara Bulian use collective agreement as work contract. Collective has been registered in Manpower and Transmigration agreement between “Badan Kerjasama Perusahaan Office Batanghari Regency as written under “Surat Perkebunan Sumatera (BKS‐PPS)“ ‐ Plantation company Keputusan Kepala Dissosnakertrans No. 568/505/DSKT in Sumatera with “Pengurus Daerah Federasi Serikat tentang Pendaftaran PUK SPPP.SPSI PT Inti Indosawit Pekerja Pertanian dan Perkebunan Serikat Pekerja Subur” dated 18th April 2011. Seluruh Indonesia (PD FSP.PP‐SPSI) Propinsi Jambi” – Worker union federation for agriculture and plantation Records of meeting between company and worker sector, Jambi. The collective agreement has been union; Meeting on 16th November 2013 discussing registered to Ministry of Manpower and Transmigration general issues, attended by 27 participants from as written in “Keputusan Dirjen PHBI No. Kep; company representative and worke union committee. 191/PHIJSK‐PKKAD/PKB/XII/2012” dated 17th December Attendance list and minutes of meeting maintained. 2012. The collective agreement is valid until 13th November 2014. Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under PT IIS Muara Bulian provides a good standard of housing adult supervision and when not interfering with for staff and workers as well as free electricity, water, education programmes. Children are not exposed to elementary schooling, crèche, places of worship, and hazardous working conditions. medical facilities. In addition, company employs a doctor fulltime and makes regular visits to each of the clinics for PT IIS Muara Bulian is also display Company policy on consultations. workers age in accordance with national laws. Policy about worker age under SOP AA‐HR‐305‐2‐RO Based on document verification for heavy equipment mentioned that the company’s will employ worker age rental agreement/contract No.045//E3KMB14/02 dated above 18, document check on workers register reveal 13th February 2014 and SPK No.026/E3KMB/14/01 dated that the workers are above 18 years old. 2nd January 2014 between PT IIS – Muara Bulian with PT UNITEDA ARKATO shows there is a clause requirement All new hires are required to produce their National that contractor has to meet the regulation related to Identity Card and a copy was held on file as a check for man power – Chapter 12 Responsibility. Based on age. Inspections of the Mills and Estates did not find any interview with worker of PT UNITEDA ARKATO, states children or under‐age workers at the workplace. Based the contractor has registered their worker into on document verification Afdeling II worker as of May JAMSOSTEK programme, however has not met the 2014 and interview with leader of worker union, shows minimum wage requirement and not equipped with no worker below age of 18 years employed. Operator License (SIO). Criterion 6.8: Any form of discrimination based on race, Criterion 6.6: The employer respects the right of all caste, national origin, religion, disability, gender, personnel to form and join trade unions of their choice sexual orientation, union membership, political and to bargain collectively. Where the right to freedom affiliation or age is prohibited. of association and collective bargaining are restricted under law, the employer facilitates parallel means of PT IIS – Muara Bulian has company policy stating PT IIS independent and free association and bargaining for all committed to treat all employees equally, in term of such personnel. recruitment, appraisal, work condition and environment without discrimination based on tribe, caste, origin, PT IIS – Muara Bulian has a company policy signed by religion, disability, gender, sexual orientation, union Deputy Managing Director dated 26th November 2012. membership, political association and/or age. One point in the company policy is “to respect the right of all employee’ to form and join worker union of their Interviews of male and female workers confirmed that choice and to bargain collectively”. Based on interview PT IIS Muara Bulian anti‐discrimination policy was strictly with leader of “PUK SPSI PT IIS” – worker union in PT IIS, enforced. They were not aware of any cases of

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 15 discrimination. Inspection of pay records for the Mills on “Peraturan Menteri Pertanian and Estates did not find any evidence of discrimination. No.14/Permentan/OT.140/2/2013 tentang Pedoman Penetapan Harga Pembelian TBS kelapa sawit produksi Criterion 6.9: A Policy to prevent sexual harassment pekebun”, “Peraturan Gubernur Jambi No.36 tahun and all other forms of violence against women and to 2011” and “Keputusan Gubernur Jambi protect their reproductive rights is developed and No.206/KepGub/Disbun/2014 tentang pembentukan applied. Tim Penetapan dan Pemantauan Harga Pembelian TBS produksi Pekebun di Provinsi Jambi”. PT IIS ‐ Muara Bulian has implemented the Company Policy on prevention of sexual harassment and violence Interviews with KUD Barokah and KUD Makmur Rezeki, against women. The policy is prominently displayed on states they understood the agreement ofr plasma notice boards at the Mills and the Estates muster areas. development signed with PT IIS – Muara Bulian. KUD Interviews of female staff, workers and union understand the FFB pricing mechanism referred by representatives confirmed that PT IIS ‐ Muara Bulian has company. continued to observe their rights under the Company Policies. Interviews of partnering‐KUD and contractors at the Mills and Estates found they had worked for PT IIS ‐ PT IIS – Muara Buluian has a written Company Policy Muara Bulian for more than 5 years and considered the stating company committed to prevent terms and conditions fair. The Head of KUDs and sexualharrasment and any form of violence against contractors stated that PT IIS ‐ Muara Bulian makes women and to protect their reproductive rights. payments in a timely manner.

There is a gender committee established in 11th February Criterion 6.11: Growers and millers contribute to local 2011, actively meets and discussing general agenda and sustainable development wherever appropriate. other issue related to handling sexual harassment, dissemination of sexual harassment prevention and Based on “Laporan Pelaksanaan RKL‐RPL Semester II specific grievance mechanism. tahun 2013” – Environment management and monitoring report 2013, PT IIS – Muara Bulian has spend Based on interview with the leader of gender CSR budget of Rp.602.275.037. The CSR consist of heavy committee, company has implemented the protection of equipment for road maintenance, building material for women reproductive rights, in form of maternal leave, public infrastructure facility, community’ economic period leave, regular pregnancy check for female empowerment (fishing net, rice seedling, cattle), cattle‐ sprayers and strictly prohibit pregnant and/or raising training, clean water source facility, education breastfeeding female worker applying pesticides. and cultural. Female staff and workers stated they were not aware of any cases of sexual harassment and they understood the Interviews with Bulian Jaya village head and Karya Mukti process for raising such issues through the Grievance village head, PT IIS – Muara Bulian has implemented Mechanism. their social programme such as helping the education facility, plasma farmer development, donation to Criterion 6.10: Growers and mills deal fairly and orphanage, heavy equipment provision, and so on. The transparently with smallholders and other local social‐economic impact significantly to community is the businesses. development of plasma farmer.

Interviews of Head of KUDs confirmed they had a very Principle 7: Responsible development of new plantings good working relationship with PT IIS ‐ Muara Bulian and received good support in the form of training by No new planting planned on any estate included in the Smallholder Development Assistants. The Head of KUDs scope of this assessment. Not applicable. confirmed they understood the FFB price that is determined twice monthly by a Committee consisting of Provincial Government, Palm Oil Producers and Principle 8: Commitment to continuous improvement in Smallholder Cooperative Representatives. The Head of key areas of activity KUDs meet with PT IIS weekly and are involved in the negotiation of prices for FFB transport and premium for Criterion 8.1: Growers and millers regularly monitor FFB quality. The KUDs manage all transport of and review their activities and develop and implement smallholders’ FFB to the PT IIS Muara ‐ Bulian Mill and action plans that allow demonstrable continuous the contracts for road maintenance. improvement in key operations.

PT IIS – Muara Bulian referring to FFB pricing structure as PT IIS Muara Bulian reviewed and updated the determined in “Rapat Tim/Pokja Penetapan harga TBS continuous improvement plan, which lists the provinsi Jambi” ‐ weekly meeting of Jambi Province FFB‐ improvements for the company’s strategic objectives. pricing working group. The working group consist of The company has achieved improvement in FFB yield government body, Plantation Company and oil palm from its estates and OER for the mills in the current year. farmer. The manual for calculation of FFB pricing based

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PT IIS Muara Bulian has continued to support its to ensure all legal documents are valid and registered Smallholders through the Farmer Development prior to its expiry date. KUD Karya Tani provided the list: Department. In particular, PT IIS Muara Bulian has been ‐ "Tanda Daftar Perusahaan Koperasi" No. working with smallholders to improve their FFB yields as 040624700002 dated 6th February 2012, valid until 6th well as to maintain their RSPO Certification. February 2017. Re‐registration No.62/BPMD DAN PPT/TDP/II/2012 dated 1st February 2013. PT IIS – Muara Bulian continues to redue the use of ‐ "Surat Izin Usaha Perdagangan Menengah" paraquat over time. The performance of waste No.15/BPMD DAN PPT/SIUP‐PM/II/2012 dated 6th segregation continues to improve. February 2012, valid until 6th February 2017. Re‐ registration No.62/BPMD DAN PPT/SIUP‐PM/II/2013 Muara Bulian Mill manages to safe 448 liters of water dated 1st February 2013. per hour during kernel station operating. Further, Mill ‐ "Izin Tempat Usaha" No.85/BPMD&PPT/II/2012 dated manages to reduce the use of power as much as 11kW, 6th February 2012, valid until 6th February 2017. Re‐ through modification of wet‐dry kernel 1 and 2 into registration No.70/BPMD‐PPT/I/2013. single‐motor and chute dry kernel lines. ‐ "Pengesahan Akta Perubahan Anggaran Dasar Koperasi Unit Desa Karya Tani" No.01/KPTS/PAD/BH/IV.2/ Records of follow‐up action against RSPO audit findings 02/V/2009. are maintained. Corrective action taken has been ‐ "Nomor Pokok Wajib Pajak" No.1.488.576.8‐213. verified and found to be satisfactory. ‐ "Akta Perubahan Anggaran Dasar Koperasi KUD Karya Tani" with decree No.01/KPTS/PAD/IV.2/02/V/2009 3.2 Summary of Findings – Scheme Smallholder dated 18th May 2009. (RSPO P&C INA-SWG, 2009) Principle 2: Compliance with applicable laws and Principle 1: Commitment to Transparency regulations.

Criterion 1.1 Scheme Manager provide adequate Criterion 2.1: There is compliance with all applicable information to other stakeholders on environmental, local, national and ratified international laws and social and legal issues relevant to RSPO Criteria, in regulations. appropriate languages & forms to allow for effective participation on decision making. Document review and interviews with scheme manager, confirmed that PT IIS – Muara Bulian is supporting Sampled cooperatives, KUD Barokah and KUD Makmur smallholders to comply with essential regulation. List of Rezeki provide information on environment, social, legal regulations relevant to smallholder operation consisted issues that publicly available for external parties. of 38 regulations. Smallholder supported by Scheme Requerst for information regulated under “Permintaan Manager has evaluates all relevant regulation as per 31st Informasi Eksternal”. Maximum time limit to response December 2013. any information request determined for 14 working days. Retention time for record of information request Some example showing compliance to relevant and responses determined as 3 years. Review on Log regulation as follows: Book confirmed all of responses to information request ‐ KUD Barokah was established in 1996 and has been are within 14 days. registered as per letter No.BH.28/KWK.5/VI/96 dated 12th June 1996. The cooperative has tax Criterion 1.2: Management documents are publicly registration No.1.782.653.8‐331. The latest RAT ‐ available except where this is prevented by commercial Annual member meeting was held on 27th March confidentiality or where disclosure of information 2014. would result in negative environmental or social ‐ KUD Makmur Rezeki was established back in 1992, outcomes. registered through establishment deed No.1020/BH/1992 dated 21st September 1992. The A document master list is available, explains type of latest RAT ‐ Annual member meeting was held on document owned by KUDs, validity, retention time. The 24th March 2014. list of document comprise of MoU between KUD with PT IIS, KUD’ Deed of establishment, Tax registration Scheme manager will inform the scheme smallholders number, Social Activity programme, AMDAL – Social (cooperative) if there is any a change or amendment in Environmental Impact Assessment, HCV identification laws and regulations. Scheme manager conduct document, Social Impact Assessment, FFB price records, meetings with the cooperative members to ensure Replanting plan, etc. The management made available compliance. Summary of permits and licenses checked upon request documents such as land use right, social and recorded in regulation record book ‐ “Daftar and environmental impact assessment report, Regulasi yang berhubungan dengan perkebunan dan organizational structure information. Land title KUD”. information is in section 2.2 below. Criterion 2.2: The right to use the land can be KUD Karya Tani developed a mechanism for legal demonstrated and is not legitimately contested by local checking. There is a list of legal requirement maintained communities with demonstrable rights.

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Document review on two sample KUDs (KUD Barokah Criterion 4.1 Operating procedures are appropriately and KUD Makmur Rezeki), found that Smallholders are documented and consistently implemented and able to show legal ownership of the land or land‐use monitored. rights (land certificate). Scheme smallholders head keeps copy of the land title and individual members. Maps are KUD Barokah and KUD Makmur Rezeki refer to available at the scheme smallholders (cooperative office) Agricultural Policy Manual issued by PT IIS ‐ Muara and the head of scheme understands the map. Bulian. The Manual comprise of seedling preparation, pest and disease control, fertilizer application, spraying, Boundary among farmers and cooperative level are pest control, IPM, harvesting, pruning, road clearly identified and available in field. Smallholders are maintenance and transport, and FFB harvesting. able to show the boundary during the field inspection and operate within their boundary. Scheme Manager assisted by their own field assistant and assistant from PT IIS to conduct daily inspection and No disputes noted or highlighted during the interview monitoring to ensure the procedures is implemented with cooperative members and surrounding community. and there are records for fertilizing, sprying, census, etc. Should any dispute raise, cooperative will receive and KUD Barokah and KUD Makmur Rezeki demonstrate the response into, record and based on “Mekanisme monitoring records of harvesting activity in their oil palm Komunikasi, Konsultasi dan Keluhan”. field.

Criterion 2.3 Use of land for oil palm does not diminish Criterion 4.2 Practices maintain soil fertility at, or the legal or customary rights of other users without where possible improve soil fertility to, a level that their free, prior and informed consent. ensures optimal and sustained yield.

Interview with the PT. IIS ‐ Muara Bulian Group Scheme Record of distribution of fertilizer from Scheme Manager Manager, Head of KUDs and members revealed that the to cooperative and further distrubuted to scheme land is not a customary land. Originally the land was smallholders/members through cooperative is available. from the government and allocated to the smallholders Type of fertilizer (ZA, MOP, Kiserite, Dolomit, Borat, etc) since late 1990s. This was also captured from and quantity (kg) is available. The fertilizer stakeholder consultation with community surrounding. recommendation is based on annual leaf sampling and analysis result. Application follows the recommendation. Principle 3: Commitment to long-term economic and Record of application maintained in cooperative. financial viability. Production records for the past 3 years available, shows Criterion 3.1: There is an implemented management the production for 2011 – 2013 and projection for 2014. plan that aims to achieve long-term economic and financial viability. There was no application of EFB and.or POME in KUD Barokah and KUD Makmur Rezeki, this was due to access Estimation on production and estimation on cost road is distant from the mill. developed by scheme smallholders and their team with assistance from PT IIS scheme manager for 2014 – 2016; Criterion 4.3 Practices minimise and control erosion and covering FFB Production, cost of planting (seedling, degradation of soils. fertilizing, maintenance, harvesting) and nett profit. Field visit to sampled plots of KUD Barokah and KUD Replanting program planned for 2018 under oil palm Makmur Rezeki, existing planting has been prepared planted in 1990; PT IIS help KUD develop guidance for with terrace. Frond stacking in “U” letter is consistent in replanting programme under Draft Replanting all farmer blocks to minimize erosion. Furthermore, documents. Under the guidance, the replanting smallholders members are also explained the function of technique from felling, chipping and stacking, harrowing, U‐Shape frond stacking to control erosion in slope area, terracing, stop bund, leguminous cover crop planting. and they have implemented on their plots. The draft includes replanting cost estimation. Replanting Program KUD Barokah: The planting year in sample plots visited was 1993 and 660 Ha in 2018 for KT 78 – KT 91; 1994, there is no such immature plant. 570 Ha in 2019 for KT 93 – KT 104. Based on soil map, there is no peat soil. Low land does Replanting Program KUD Makmur Rezeki: occur in a number of area (KT), drainage maintenance 548 Ha in 2016 for planting year 1992, KT 1‐13; implemented on annual basis. Field visit suggest the 152 Ha in 2018 for planting year 1992, KT 14‐16; farmer tries to maintain drainage in low‐lying area to 20 Ha in 2019 for planting year 1992, KT 106 only; minimize water‐log. 10 Ha in 2020 for planting year 1992, Tanah Kas Desa; Criterion 4.4 Practices maintain the quality and availability of surface and ground water. Principle 4: Use of appropriate best practices by Scheme Manager.

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Training on soil and water conservation in form of team has received appropriate training from PT IIS’s Penyuluhan Panen/Susun Pelepah dated 10 February Scheme Management. Scheme Manager controls the 2014. The purpose of the training is to minimize soil dosage, type of herbicide use (to each target species) erosion to water ways. The training attended by 10 KUD and area of application. PT IIS stored and regulates the members, representative from farmer sub‐groups (KT). herbicide to be applied on the field as per farmer/sub‐ group requisition. Upon requisition, PT IIS pesticide Monthly records of fertilizer and pesticides usage storage will issue the amount of herbicide to spraying available with detail of balance stock, area applied, type team, field application supervised by scheme and quantity (litre/gram). Document review on two management. sample KUDs confirmed all fertilizer and pesticides usage are available and up to date until second semester of KUD Barokah and KUD Makmur Rezeki no longer stores 2013. Frond stacking in “U” letter for flat area and frond herbicide and/or pesticide. Herbicide and/or Pesticide stacking against slope direction is practiced to minimize comes from PT IIS’s storage. As written in 4.6 for PT IIS erosion. above, only herbicide registered and approved by the Department of Agriculture were used, such as Triclophyr, Metil metsulfuron, Glyphosate, and Criterion 4.5 Pests, diseases, weeds and invasive Paraquat. introduced species are effectively managed using appropriate integrated Pest Management (IPM) The members of the Scheme Smallholders have agreed techniques. to the PT IIS’s management to eliminate paraquat. At the moment paraquat use is minimized with combination of Scheme smallholder in collaboration with PT IIS’s manual slashing. PT IIS ensured that smallholders are Scheme manager perform census on pest attack on well understood with the use of paraquat. Appropriate monthly bases and recorded under “Laporan Hasil training was conducted for smallholders on 2012. Pengamatan dan Pengendalian Hama dan Penyakit” (Report on monitoring and control of Pest and Disease) There is no use of pesticide, only herbicide. Record of latest record on January 2014. Monitoring was herbicide used for the targeted weeds with appropriate conducted for leaf pest (bag worm, caterpillar) attack dosage as per the recommendation on the label. monitoring on rat attack, Tirathaba attack and Quantity used, method and time of application is Ganoderma symptoms. referring to guidance from Scheme Manager. The members of the Scheme Smallholders have agreed with Scheme smallholder members are able to explain the PT IIS Muara Bulian management to reduce paraquat. IPM and pest control measures including census of leaf No blanket spraying noted at the field visit. eating pest (nettle caterpillar). They are also aware of the benefit of barn owl. Beneficial plants (Turnera and Herbicide is applied by spraying team – “Team Unit antigonon) are planted and evidence noted during Semprot”. “Team Unit Semprot” is equipped with inspection of the smallholders block. No serious pest goggle, hat, masker, apron, rubber glove, coverall suit attack was seen during field visits. PT IIS provide and rubber boot. appropriate training for smallholders. KUD Barokah “Penyuluhan Pengendalian Hama Terpadu” dated 28th Agrochemicals are stored at the scheme pesticide December 2013, attended by 22 members. A storage. Empty containers are kept and collected, then representative of each KT is participating in the training. delivery to PT. IIS for further disposal through the KUD Makmur Rezeki ‐ “Penyuluhan Pengendalian Hama authorised dealer who is collecting the schedule waste Terpadu” dated 2nd December 2013, attended by 36 together with PT IIS. members. A representative of each KT is participating in the training. The training material covers identification Spraying team ‐ TUS is appointed to spray herbicide, for and handling of leaf‐eating pest and ganoderma. weed controlling. TUS workers are under PT IIS – Muara Folowed up with Planting of beneficial plant: Bulian pay roll. Scheme Manager demonstrates the “Monitoring penanaman bunga Cassia tora/Turnera medical checkup result from 22 TUS workers. subulata” 20‐22nd April 2014, 6 seedlings at each farmer plot. Installation of barn owl boxes, 1 boxes per sub‐ KUD Barokah demonstrates “Pelatihan Penyuluhan group (KT). Pupuk dan TUS” dated 1st May 2014, attended by 30 members. KUD Makmur Rezeki shows “Sertifikat Criterion 4.6 Agrochemicals are used in such a way that Pengguna Pestisida Terbatas No.KP3/VI/2012” under does not endanger health or the environment. There is name Hamid dated 4th July 2012. no prophylactic use, and where agrochemicals are used that are categorised as World Health Organisation Scheme manager regulates the use of herbicide, with Type 1A or 1B, or are listed by the Stockholm or maintained records. Records showed: “Program Rotterdam Conventions, growers are actively seeking penggunaan paraquat untuk semprot gawangan, pakisan to identify alternatives, and this is documented. dan clydemia tahun 2014”: February: 42.6 liter, actual 0; March: 41.4 liters, actual 0; April: 41.4 liters, actual 0; KUD employs spraying team (Team Unit Semprot – TUS) May: 40.2 liters, actual 0; June: 41.4 liter, actual 0; July: of PT IIS –Muara Bulian to apply herbicides. The spraying 48.6 liters, actual 0.

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“Pembahasan K3 KUD Barokah” dated 30th December Criterion 4.7 An occupational health and safety plan is 2013, attended by 51 KUD members. documented, effectively communicated and “Pembahasan K3 Panen dan Pupuk ‐ KUD Makmur implemented. Rezeki”, dated 8th May 2014 and attended by 19 cooperative members. Health and safety guidelines are developed and prepared by the PT IIS Scheme Manager for PPE provided by Cooperative and farmers group for all implementation in smallholder area. All the scheme workers. Fire extinguisher and first aid box available at smallholders have this document which covers safe the office and store. Field supervisor (mandor) is also operating procedure, training, PPE implementation, trained and equipped with first aid box. awareness posters and signage. Criterion 4.8 All staff, workers, smallholders and “Rencana Kerja dan Keselamatan Kerja” explains the contractors are appropriately trained. emergency response plan in the case of emergency situation such as earthquake, flood, landslide and fire Training Program identified according smallholders’ break. “Panduan Kesehatan Keselamatan Kerja” need which was arranged by both PT IIS Scheme identifying the typical personnel protective equipment Manager and Scheme Smallholders. Training includes for each of oil palm activities. Example: PPE for harvester GAP, pesticide application, soil and water conservation, identified: helmet, goggle, glove, safety shoes, sickle IPM, HCV, harvesting, OSH, first aid, socialization on cover. “Program Manajemen K3 PT IIS Kebun Plasma AMDAL, ERP, fire fighting, zero burning technique for Muara Bulian tahun 2014” Health and Safety replanting etc. Training is documented and kept at the Management Program for KUD Barokah and KUD scheme smallholders/cooperative office. A number of Makmur Rezeki. training has been planned. “Pestisida Terbatas” – The use of limited pesticide training planned for September Current Health and Safety Program: Ifre extinguisher 2014; Integrated Pest Management training planned for location mapping, Exit route mapping, assembly point September 2014; Balanced fertilizer training planned for mapping, etc; with target date of completion 31st April and October 2014; Weed control training, planned December 2014; Prepare and trains Emergency for April 2014; Basic Fire training planned for 2nd Response Team on 30th June 2014; Conduct drill and November 2014; measure the effectiveness on annual basis, at minimum; Safety briefing to FFB transporter driver, on 31st Realization of training programme recorded for two December 2014; sample KUDs recorded under “Rencana dan realisasi pelatihan petani plasma tahun 2014”, for example: KUD Barokah and KUD Makmur Rezeki has a structure of KUD Barokah: Emergency Response Team. The team commander is “Pelatihan HCV, SIA, AMDAL & Konservasi Tanah dan KUD’s chairman. The structure is being formalized Air” – Soil and Water conservation training planned for through “Surat Keputusan KaDisNaKer Kabupaten May 2014, actual 10th February 2014; “Pelatihan Batang Hati No.568/032/DSKT/VI/2012 tentang Pengendalian Gulma” – Weed control training planned Pengesahan Susunan Keanggotaan Panitia Pembina for April 2014, actual 25th April 2014 attended by 21 Keselamatan dan Kesehatan Kerja Unit KLM PT IIS” dated members. 23rd June 2012. KUD Makmur Rezeki: “Pelatihan HCV, SIA, AMDAL & Konservasi Tanah dan Scheme Manager provide training on health and safety Air” – HCV, SIA, water and soil conservation training to all KUD. Record shows training for KUD Barokah planned for May 2014, actual 12th March 2014 and “Penyuluhan Kesehatan dan Keselamatan Kerja (K3)” attended by 30 members; Training replanting planned related to hazard identification, risk level, and risk for January 2014, actual 29th May 2014 and attended by management. The health and safety training conducted 44 cooperative members; on 30th December 2013, attended by 51 smallholder member. For KUD Makmur Rezeki, “Pembahasan K3 Principle 5: Environmental responsibility and Panen dan Pupuk”, dated 8th May 2014 and attended by conservation of natural resources and biodiversity. 19 cooperative members. Criterion 5.1 Aspects of plantation and mill Scheme Manager helps KUDs to monitor the health and management that have environmental impacts are safety performance, including field activity. Record of identified, and plans to mitigate the negative impacts accident is maintained. KUD Barokah shows “Rekaman and promote the positive ones are made, implemented Kecelakaan Kerja tahun 2012”, 6 cases recorded ‐ No and monitored, to demonstrate continuous accident recorded throughout 2013 and 2014. KUD improvement. Makmur Rezeki shows no accident recorded throughout 2013 and 2014. KUD Barokah and KUD Makmur Rezeki is using environmental impact assessment from PT IIS – Muara KUD Barokah and KUD Makmur Rezeki held meetings to Bulian’ ‐ Analisis Mengenai Dampak Lingkungan discuss health and safety performance. Record shows (AMDAL), consist of document ANDAL, RKL and RPL. PT IIS – Muara Bulian’ environmental document includes

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 20 the impact assessment of KUD, and cannot be KUD Makmur Rezeki has appointed Mr. Muzamil as separated. responsible officer for HCV management as per “Surat Keputusan Pengurus KUD Makmur Rezeki Environmental Impact Assesment ‐ Analisis Mengenai No.01/Kpts/KUD Makmur Rezeki/VII/2012 tentang Dampak Lingkungan (AMDAL) consist of document Penunjukkan atau pengangkatan Petugas Perlindungan ANDAL, RKL and RPL as approved through “Persetujuan Satwa Liar dan Tumbuhan dilindungi” dated 10th July Komisi Amdal Departemen Pertanian No. 2012. 014/Andal/RKL‐RPL/BA/V/1995 tentang Persetujuan There is no potential conflict between human and ANDAL dan RKL‐RPL perkebunan Kelapa Sawit dan Pabrik animal; as there is not any fauna identified has potential Minyak Kelapa Sawit PT Inti Indosawit Subur” dated 3rd conflict with human. May 1995. The document covers scope of areal of 32,000 Ha consist of Kuala Tungkal Estate 20,000Ha and KUD Makmur Rezeki kept the result of HCV identification Muara Bulian Estate 12,000Ha and palm oil mill capacity in KUD office. KUD Barokah has disemminated the HCV 90 Tonnes FFB/hour for Kuala Tungkal and 30 Tonnes identification result to its member; dated 16th January FFB/hour for Muara Bulian. 2014 attended by 11 cooperative members.

Revision on AMDAL document is available for PT IIS ‐ Criterion 5.3 Waste is reduced, recycled, re-used and Muara Bulian through “Surat Persetujuan Kepala Badan disposed of in an environmentally and socially Lingkungan Hidup Provinsi Jambi No. 474/BLHD/2010 responsible manner. tentang Persetujuan Revisi Rencana Pengelolaan Lingkungan Hidup (RKL) dan Rencana Pemantauan Agrochemical waste management plan developed by the Lingkungan Hidup (RPL) PT Inti Indosawit Subur seluas PT IIS Scheme Manager and scheme smallholders in 9.188 Ha dan Pabrik Minyak Kelapa Sawit Kapasitas 60 term of “Rencana Pengelolaan Sumber Polusi & Limbah Ton/Jam di Kecamatan Maro Sebo Ilir, Kabupaten di Perkebunan Petani”. Waste management information Batanghari, Provinsi Jambi” dated 10th August 2010. The is posted on the cooperative office notice board. revision occurs due to changes in mill capacity from 30 Agrochemical empty containers collected and sent to the Tonnes FFB/hour into 60 Tonnes FFB/hour, land estate central collection store and disposed through application separation from Tungkal Ulu Group and licensed collectors. Scheme smallholders are able to social dynamics back in 2010. explain clearly of measures to dispose hazardous chemical empty containers. Interview with smallholders PT IIS ‐ Muara Bulian reports twice a year to Government and stakeholders found no complaint related to disposal on the RKL&RPL monitoring program results and the of hazardous chemical. most recent RKL & RPL report was July – December 2013. The RKL/RPL covers all the operating units Criterion 5.4 Efficiency of energy use and use of including the scheme smallholders. Based on interview renewable energy is maximised. with village heads, community is involved in the environment management, especially social aspect Guidance to improve the efficiency of energy use is given through coordination meeting quarterly including by the Scheme Manager to the members of the scheme Plantation office from Batanghari Regency. during the monthly meeting. Smallholders carry out their operational works manually and none mechanised Criterion 5.2 The status of rare, threatened or except for the FFB transport. endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, Criterion 5.5 Use of fire for waste disposal and for shall be identified and their conservation taken into preparing land for replanting is avoided except in account in management plans and operations. specific situations, as identified in the ASEAN guidelines or other regional best practice. Interview with smallholder member from two sample KUDs confirmed that smallholders are able to mention Zero burning policy is available for the scheme protected flora and fauna in their local terms, for smallholder and applicable for them similar to the PT IIS example: Rusa (Deer), Cobra, Cekakak Belukar, Macan Muara Bulian Group. Members of the scheme Akar (root tiger), Phyton, burung hantu (Barn Owl), understand the policy. No replanting in near future but Biawak, musang (fox). KUDs made available a list of the understanding and awareness of zero burning protected flora and fauna. The list consist of 82 flora not technique during replanting is already explained to the protected, 5 species of IUCN’s LR‐DD status. The list also scheme members and they are able to explain during encompass 74 fauna (7 species of mammals, 63 species interview. of birds, 4 species of reptiles) of which 20 species protected, 7 species under CITES Appendix II, 1 species Emergency Response Plan has been developed with PT under CITES Appendix III and 1 species under IUCN‐Vu IIS Scheme Manager. Emergency Response Team, (vulnerable) and 48 species under IUCN‐LC. identified the emergency commander, logistic commander, transportation commander, etc. Contact KUD Barokah has appointed Mr. Arianto as responsible number of local authorities, companies and Search and officer for HCV management.

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Rescue team has been prepared. Basic Fire simulation conducted by Smallholders organisation and recorded in planned for November 2014. Logbook. Minutes of farmer group communication through forum, coordination meeting and annual KUD Barokah and KUD Makmur Rezeki own a complete meeting. Smallholders have a periodic meeting, known set of simple firefighting equipment. A list of equipment as annual general assembly. Smallholders organisation is prepared to control the readiness, consist of simple has a division which responsible on communication and alarm, bucket, shovel, hoe, hook, machete, axe, consultation. knapsack, portable water pump and water hoses. However, KUD Barokah has not been able to Smallholder prepared saving program to support the demonstrate records on communication and cost for replanting. PT IIS introduce replanting consultation with local communities. Document review programme explained under Draft replanting PT IIS upon "Logbook Surat Masuk dan Surat Keluar". (Major Kebun Plasma Muara Bulian. NC was raised under 6.2.1)

Criterion 6.3 There is a mutually agreed and Criterion 5.6 Plans to reduce pollution and emissions, documented system for dealing with complaints and including greenhouse gases, are developed, grievances, which is implemented and accepted by all implemented and monitored. parties.

Similar to previous assessment, Identification of In relevant to Criterion 1.1 and 6.2, system for pollution is carried out by the Scheme Manager with the complaints is in place at the smallholder organisation. participation of the scheme members. Copy of the The system has been described in mechanism resolution identification is available at the scheme office. Pollutants flow chart. Records are kept in logbook, minutes of identified are dust emission from the road and noise meeting and respond recorded in the complaint and from transport. The emission in the smallholders grievances book. No complaint was noted. operation is mainly from the noise during FFB transportation by the truck. The drivers are advised and Criterion 6.4 Any negotiations concerning briefed to drive slowly when passing by the roads at the compensation for loss of legal or customary rights are villages. Dust emission is identified during the drought dealt with through a documented system that enables season. indigenous peoples, local communities and other stake holders to express their views through their own Principle 6: Responsible consideration of employees and representative institutions. of individuals and communities affected by scheme smallholders. During ASA2, there are no disputes on land acquisition and ownership because the land belongs to farmers and Criterion 6.1 Aspects of plantation and mill they have land certificate. management that have social impacts are identified in a participatory way, and plans to mitigate the negative Criterion 6.5 Wage and conditions for employees and impacts and promote the positive ones are made, for employees of contractors always meet at least legal implemented and monitored, to demonstrate or minimum industry standards and are sufficient to continuous improvement. meet basic needs of personnel and to provide some discretionary income. Similar to previous assessment, Social Impact Assessment document available and mentioned within Visit to two sample KUD and review on payroll of the frame references of AMDAL documents. All impact workers confirmed the wage structures are met with assessment conducted and referenced to the nucleus minimum wage regulation. estate including monitoring of social impact (RPL/RKL). Work contract are also available for each full time Implementation timetable described in master plan of workers in both KUDs. Field work and harvesting is continual improvement. Inspection to two sample KUDs carried out by the smallholders themselves and confirmed the AMDAL documents were kept in KUD sometime by seasonal part time workers. offices. Criterion 6.6 The employer respects the right of all Criterion 6.2 There are open and transparent methods personnel to form and join trade unions of their choice for communication and consultation between growers and to bargain collectively. Where the right to freedom and/or mills, local communities and other affected or of association and collective bargaining are restricted interested parties. under law, the employer facilitates parallel means of independent and free association and bargaining for all Visit to two sample KUDs, the smallholders’ organization such personnel. has records on communication and consultation with local communities. All responses related to Policy is available for freedom to join and form workers communication and consultations are well union and installed on smallholder notice boards. documented/recorded in details. Regular However interview with workers reveal that they did not communication and consultation with local communities

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 22 form the union although they have the freedom to form However, based on document review, KUD Makmur and join trade union. Rezeki has not been able to demonstrate contract/work agreement with FFB transport contractor.(Minor NC Criterion 6.7 Child labour is not used. Children are not was raised under 6.10.3) exposed to hazardous working conditions. Work by children is acceptable on family farms, under adult Criterion 6.11 Scheme Manager contribute to local supervision, and when not interfering with education sustainable development wherever appropriate. programmes. Members of the scheme smallholder contribute monthly Smallholders are aware that child labour is not used. for welfare fund which is used for the surrounding local Interview with smallholder members confirmed and community development such as contribution to noted during the field inspection, No child labour is schools, mosque, orphanage home and for the village being used. social activities. Record of contribution to local development recorded under “Dokumen Kegiatan Criterion 6.8 The employer shall not engage in or Sosial”. support discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, Principle 7: Responsible development of new plantings. union membership, political affiliation, or age. There is no new development. This principle is Not Applicable. No migrant workers are engaged by the smallholders. Amongst the scheme members, equal opportunity policy Principle 8: Commitment to continuous improvement in is similar to PT IIS Muara Bulian Group. All the key areas of activity. employees and scheme members are treated equally. Interview with employees and scheme members Criterion 8.1 Scheme Managers regularly monitor and confirmed that they are treated equally and no any kind review their activities and develop and implement of discrimination. action plans that allow demonstrable continuous improvement in key operations. Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to Similar to previous assessment, the continuous protect their reproductive rights is developed and improvement plan includes training enhancement to the applied. scheme members focusing on best agriculture management practices. The Scheme Manager in Prevention of Sexual Harassment policy is extended to consultation with the scheme members developed the scheme smallholder by the management of PT IIS ‐ improvement plan based on the social and Muara Bulian and the information is briefed to the environmental impacts. members by the Scheme Manager and the Group Heads. Female employees in the office aware of the policy and 3.3 Detailed identified Nonconformities, Corrective confirmed they aware of the grievances procedure. Actions and Auditor Conclusions

Criterion 6.10 Scheme Managers deal fairly and Corrective actions with respect to the nonconformities transparently with smallholders and other local raised at the last assessment have been reviewed and businesses. found to be effectively implemented.

Review on the documentation (Log Book), No repetition During ASA2, There are 2 (two) Major nonconformities of complaint received from nucleus estate (partner against indicator 2.1.1 of RSPO P&C for Mills and Estates companies) and/or other local business partners to KUD. and indicator 6.2.1 of RSPO P&C for scheme smallholder.

In relation to Criteria 6.10 (RSPO P&C for Mill and Also, There are 2 (two) Minor nonconformities raised Estate), FFB Pricing is decided through the committee against indicator 5.3.3 of RSPO P&C for Mills and Estates; comprised by government Agriculture Department and indicator 6.10.3 of RSPO P&C for scheme (Dinas Perkebunan), smallholder cooperative smallholders and There are several Observation/ representatives and palm oil producers. Flow chart of Opportunity for improvement highlighted. the FFB pricing is available at the scheme smallholder office. The weekly FFB pricing is posted on the notice PT IIS Muara Bulian Group has prepared Corrective board at the office and this information is available to all Action for addressing Major nonconformities and the scheme members. FFB pricing, calculation of the submitted to BSI. The evidence for closing out the major payment and summary of the payment by scheme nonconformities was verified during NCR Closure manager is posted on the notice board and available to assessment. PT IIS has also submitted Corrective Action all the scheme members. Interview with the scheme Plan for Minor nonconformities and Observation/ members revealed that it is very transparent and easy to Opportunity for Improvement. understand. BSI auditor has accepted the evidence of closing out Major nonconformities and concluded those have been

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur RSPO Annual Surveillance Assessment (ASA2) – Muara Bulian Mill, Estate and Scheme Smallholders Page 23 closed. BSI auditor has also accepted the Corrective while the maximum storage time frame permitted by Action Plan for minor nonconformities and will be license is 90 days + 90 days (180 days). further verified for effective implementation during subsequent surveillance visits (ASA3) Corrective Action Plan: Company planned to find a solution to dispose-off the existing medical waste. In parallel company will find MAJOR NONCONFORMITIES another licensed transporter to dispose-off the medical waste in appropriate manner. 1. RSPO P&C for Mills and Estate

CAR reference 105536M9 BSI auditor accepted the Corrective Action Plan and will 2.1.1 Audit team found a number of legal requirements follow up during subsequent surveillance visits. have not been complied:

1. Provision of social insurance (including accident (RSPO P&C for Scheme smallholders) insurance) for temporary worker - "Pekerja Harian

Lepas" in Afdeling I; CAR reference 105536N22 2. Provision of first aider license in Muara Bulian Estate 6.10.3 Based on document review, KUD Makmur Rezeki and Palm Oil Mill. has not been able to demonstrate contract/work

agreement with FFB transport contractor. Corrective Action:

Corrective Action Plan: 1. PT Inti Indosawit Subur - Muara Bulian has registering KUD Makmur Rezeki has established contracts with all 98 temporary workers (Pekerja Harian Lepas (PHL)) into FFB transport contractor. Scheme manager will monitor social insurance scheme (Jamsostek) as of June 2014. the validity of contract from time-to-time. Furthermore, PT Inti Indosawit Subur - Muara Bulian presented evidence of payment upon social insurance BSI auditor accepted the Corrective Action Plan and will period of June 2014. follow up during subsequent surveillance visits.

2. PT Inti Indosawit Subur - Muara Bulian has nominated Observation/Opportunities for improvement and trained the paramedic, under name Lilis Anggreni

Simanjuntak as trained and licensed first aider. First aid There are seven (7) Observations identified for Mill and training carried out back in 4th February 2014. Lilis Estate; 2 (two) Observation for Scheme Smallholders; Anggreni Simanjuntak has hold the valid Licensed and None for Supply Chain for CPO Mills. Details are in Trained First Aider from Dinas Tenaga Kerja Kabupaten the section below. Batanghari for PT Inti Indosawit Subur - Muara Bulian up to 4 August 2017. 01 (4.7.1) PT Inti Indosawit Subur may wish to consider (NC Major closed out in 4th August 2014) providing PPE for sprayer is in good and safe

condition. Based on field visit and interview, 2. RSPO P&C for Scheme smallholders herbicide sprayer complained on safety goggles CAR reference 105536M20 distracted by mist. 6.2.1 KUD Barokah has not been able to demonstrate records on communication and consultation with local 02 (4.7.4) Care should be taken to consistently provide communities. Document review upon "Logbook Surat doctor evaluation upon medical checkup result. Masuk dan Surat Keluar". 03 (4.7.7) Company may consider to completing

“Rencana Tanggap Darurat” ‐ Emergency response Corrective Action: KUD Barokah and KUD Makmur plan to include other emergency situation such as Rezeki has made available the record of communication accident, natural disaster, etc. in relation to health and consultation with local communities in form of "Log and safety condition. Book Surat Keluar dan Surat Masuk". These organization have started to record communication with local 04 (4.8.2) Care should be taken to update the record of communities in the logbook. Example on 30th June 2014, training for each employee in Muara Bulian Estate. Diky Widodo from Karya Mukti village made inquiry related to payment of land and building taxes, responded 05 (5.3.2) 1. Serious consideration required to by KUD on the same date. consistently dispose‐off all an‐organic waste from (NC Major closed in 17th July 2014). domestic refuse into dedicated waste bin, instead of oil palm area; 2. Company may wish to consider the MINOR NONCONFORMITIES collection of empty‐motorcycle oil bottles to be disposed off into hazardous waste storage; (RSPO P&C for Mills and Estates) 06 (5.5.4) Company may wish to consider replacing CAR reference 105536N1 existing plastic bags (karung plastik) into gunny‐fibre 5.3.3 The storage of hazardous waste was not in line bags (karung goni), as fire fighting tool. with applicable regulation. It was found medical waste 07 (6.5.3) PT Inti Indosawit Subur provide medical clinic (sharp edges, infectious waste, etc) stored in hazardous in Muara Bulian Estate, care should be taken to waste storage since January 2013 - for over than 1 year; complete legal requirement, such as clinic permit.

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08 (5.5.3) Care should be taken to ensure the Record seen: firefighting equipment such as portable water pump, "Catatan Serah Terima Limbah B3" - Hand over minutes, knapsack/sprayer and axe is available and ready‐to‐ dated 6 September 2013 for 9 pieces of printer cartridge. use at all time. Cross check against "Lembar Neraca Limbah B3 Pabrik Muara Bulian" - Hazardous waste balance, dated 6 09 (5.3.2) Care should be taken to handle waste sourced September 2013, total is 179 pieces. The nonconformity from fertilizer's inner‐bag, consistent with th is closed on 6 June 2014. “Mekanisme Pengelolaan Sampah”.

CAR reference A824450/4 Review Status of Nonconformities (Major and Minor) 6.1.2 Parameters identified in Social Impact Assessment Previously Identified report has not been incorporated into RKL/RPL.

Furthermore management has not been able to MAJOR NONCONFORMITIES demonstrate the local communities participation during No open major nonconformities were identified at development of social management plan (Dokumen previous assessment. Manajemen Pengelolaan Sosial).

MINOR NONCONFORMITIES ASA2 findings: PT Inti Indosawit Subur has demonstrated CAR reference A824450/1 the local community’s participation during development 4.6.5 Based on document review and field visit it was of Social Management Plan - "Dokumen Pengelolaan found the plan for paraquat in 2011 was 960 litres and Sosial". reduced into 840 litres in 2012; it was noted the actual paraquat applied in 2011 was 491 litres and Based document verification, shows that social impact management decided to carried over the plan for 2011 parameter, reviewed within Social Impact Assessment into 2012, as a consequence the actual application of has been incorporated into "Laporan Pelaksanaan RKL- paraquat 2012 was increasing up to 933 litres (as per RPL Periode Semester II tahun 2013". The nonconformity th October 2012). is closed on 6 June 2014.

ASA2 finding: Review previous Nonconformities and Observation for PT Inti Indosawit Subur - Kebun Muara Bulian Scheme smallholder assessment and the details as demonstrate "Historis Pemakaian Paraquat (Gramoxone) follows. Kebun Muara Bulian". The record shows paraquat use in 2013 has been declined significant from total 1,143 liters MAJOR NONCONFORMITIES in 2012 into total 260.55 liters for year 2013. Further No open Major nonconformity was identified. All these decline trends continued for year 2014, paraquat budget nonconformities were closed out last year (2013) in total 132 liters. The nonconformity is closed on 6th June 2014. MINOR NONCONFORMITIES Two Minor Nonconformities identified on previous CAR reference A824450/2 assessment were successfully closed out. Detail of these 4.7.5 Risk assessment document for occupational health nonconformities is listed below. and safety have been made available for Muara Bulian Estate, however the procedure for hazard identification CAR reference A824450/5 and risk assessment, including the review upon Scheme Smallholder 4.1.2 Based on field visit, some area effectiveness of control applied have not been under KT 67, KT 70 member of KUD Karya Lestari and determined. some area under KT 15, KT 24, KT 37 member of KUD Tuah Sakato shows minimum effort in upkeep including ASA2 findings: A procedure for hazard identification and appropriate weed control, pruning and fertilizer risk assessment has been established. The application. nonconformity is closed on 6th June 2014. ASA2 findings: Scheme manager supports KUD Karya CAR reference A824450/3 Lestari and KUD Tuah Sakato through best management 5.3.3 Waste sourced from estate office such as practice training. The training contains oil palm upkeep photocopy machine toner, printer cartridge, used including weed management, pest and disease control, cleaner container has identified as hazardous waste, pruning and fertilizer application. however these office wastes have not been recorded and treated into hazardous waste. KUD Tuah Sakato has provided a document "Dokumen Realisasi Program Upkeep tahun 2013" demonstrating ASA2 findings: PT Inti Indosawit Subur - Kebun Muara weed control effort with Circle and path, inter-row, ferns Bulian demonstrate consistent handling of hazardous and Clydemia spraying program. The program covers KT waste sourced from estate office. Hazardous waste such 15, KT 24 and KT 37 of KUD Tuah Sakato. as photocopy machine toner, printer cartridge and KUD Karya Lestari has provided a document "Dokumen cleaner container has been handed over to licensed Realisasi Program Upkeep tahun 2013" demonstrating temporary hazardous waste storage in Muara Bulian weed control effort with Circle and path, inter-row, ferns Palm Oil Mill, record is available. and Clydemia spraying program. The program covers KT

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67 and KT 70 of KUD Karya Lestari. Field verification Observation 5 (4.7.9): PT IIS may wish to consider suggest oil palm belong to members improved. another series of first aid training for each PIC since (The nonconformity is closed on 6th June 2014). worker already forgot some of first aid training.

CAR reference A824450/6 ASA2 verification: OHS training programme is Scheme Smallholder 6.10.3 Based on interview with developed under Training Programme of Environmental Ketua KUD, KUD Tuah Sakato did not have an agreement and Sustainability, PT IIS Muara Bulian Group. There was contract with FFB transporter. training for first aider and fire fighting

ASA2 findings: KUD Tuah Sakato has demonstrate Observation 6 (4.8.2): Care should be taken to update agreement "Surat Penjanjian Kontrak Angkutan TBS". the record of training for each employee in Muara Bulian Document sighted: "Surat Penjanjian Kontrak" Estate. No.18/SPK/TS/I/2014 dated 22 January 2014 related to FFB transporter agreement between "KKPA Koperasi ASA2 verification: The company has updated training Tuah Sakato Desa Danau Embat, Kecamatan Maro Sebo record for each employee/staff. Ilir, Kabupaten Batanghari, Provinsi Jambi" with Mr. A. Syukur as FFB transport contractor. Observation 7 (5.3.2): 1. Serious consideration required (The nonconformity is closed on 6th June 2014) to consistently dispose-off all an-organic waste from domestic refuse into dedicated waste bin, instead of oil OBSERVATION palm area; 2. Company may wish to consider the collection of Observation 1 (2.1.1) PT. IIS may wish consider empty-motorcycle oil bottles to be disposed off into reviewing all relevant regulations and company’s hazardous waste storage. compliance upon relevant regulation. Example: Government regulation No. 37/2012 regarding ASA2 verification: There is a mechanism “Mekanisme Management on Watershed. Penanganan Sampah Domestik” to segregate organic and an‐organic waste, further to re‐use or re‐cycle an‐ ASA 2 Verification: PT IIS has up dated the compliance organic domestic waste (such as plastic) and composting evaluation and fulfilment against “Peraturan Pemerintah the organic domestic waste and collected empty oil No. 37 Tahun 2012 tentang Pengelolaan Daerah Aliran bottles to hazardous storages, Socialization of this Sungai” as of 6th May 2014. mechanism takes place in 24th December 2012.

Observation 2 (2.1.1) Mill manager may wish to ensure Observation 8 (5.3.4) Organization may wish to monitor operator for generator‐set joined training appropriate and analyze record on waste monitoring sourced from for the work in coordination with Labour Dept. estate office and domestic (worker housing).

ASA2 verification: PT IIS – Muara Bulian has verified ASA2 verification: The Company has recorded domestic with Labour Department regarding “Surat Ijin Operator‐ waste. SIO”, letter no. 568/1006/Sosialnakertrans, perihal Keterangan SIO which stated that SIO for Genset Observation 9 (8.1.1) PT IIS may wish to consider all operator is not mandatory, dated 13th December 2012. measurement/testing result to be regularly analyzed and provide necessary action plan for improvement, Observation 3 (4.1.2) Based on field visit to Muara example: Testing result of emission quality, effluent, Bulian Mill, piles of nut kernel found on the floor around waste water, mill water consumption, etc. kernel silo station and it was noted management have a problem in selling the nut kernel and forced to stacked ASA2 verification: PT IIS Muara Bulian consider testing the excessive production of nut kernel which cannot be result in the continuous improvement plan. stored in the silo, management admitted this was not procedural; management may wish to organized the nut Observation 10 (6.2.1): KUD Tuah Sakato may wish to kernel stock in safe and orderly manner. ensure Annual Member meeting (RAT) conducted regularly in accordance with “Anggaran Dasar KUD ASA2 verification: PT IIS Muara Bulian Mill has taken Tuah Sakato”. action to find out buyer of nut kernel, it was found no any overflow nut kernel stacking. ASA2 verification: Smallholders have a periodic meeting, known as annual Member Meeting (RAT), KUD Observation 4 (4.7.1): PT IIS – Muara Bulian may wish to Sakato has conducted RAT in 2014. consider providing PPE for sprayer is in good and safe condition. Based on field visit and interview, herbicide Observation 11 (RSPO SCCS E.5.1) Muara Bulian Mill sprayer complaint on safety goggles distracted by mist. manager, staff and operator have joined supply chain ASA2 verification: PT. IIS has prepared PPE for spryer training for similar certification scheme, however it is team in good and safe condition required to joined training for Modul E. RSPO supply chain mass balance for CPO mill.

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ASA2 verification: Staffs in the weighbridge, inventory, involving district head (camat), village heads and storage and processing, document control have Plantation office from Batanghari. Donation and charity attended training. The company provided training RSPO from PT IIS – Muara Bulian is noted, involving local supply chain and traceability on 28th February 2013 and community’s aspiration. There is no land dispute noted. 2nd July 2013 for all staff from Muara Bulian Palm Oil KUDs are contributed in village development for Mill, included RSPO Module E (Mass Balance) education development and village road maintenance. KUD is committed for tax payment as source of local Observation 12 (RSPO SCCS E.6.1) To date company has government budgeting. not making any claim (corporate communication) related to the use of RSPO certified palm oil product, Company Response: PT IIS – Muara Bulian and KUDs however PT IIS may wish to consider including RSPO committed to build mutual relationship with communication rules into existing documentation surrounding villages. system. Auditor comment: Accepted.

ASA2 verification: the company has considered RSPO Worker Union (Serikat Pekerja Seluruh Indonesia (SPSI) Communication rules in their document system, PUK Group Kebun Muara Bulian (KMB): eventhough no claim so far. Comment: Company has paid the salary according to minimum wage requirement. There is working 3.4 Noteworthy Positive Components agreement, taking into consideration the aspiration from each unit. Company has implement worker’s PT IIS maintained commitment to bring the normative rights such as minimum eage, overtime, smallholders under their management into the RSPO social insurance, facilities and amenities (housing with certified scope. During this Annual Surveillance clean water, electricity, medical treatment, PPE, etc). Assessment this was implemented successfully. Company Response: Company agree and continuously commited to follow all agreement. Riparian enhancement work is progressing well with Auditor comment: Accepted, note worthy positive trees planted along the riparian and checked during the comment. initial assessment is now growing well. Gender committee: During this assessment there was no any kind of Comment: Company supports gender committee disputes highlighted to the audit team. Interview with through policy against discrimination and sexual local community and government department officials harassment. Company protects the reproductive rights further confirm that there is no any kind of disputes. of female employees in form of maternal leave, period leave, medical examination for sprayers and fertilizer applicator. Pregnant and/or breastfeeding female 3.5 Issues Raised by Stakeholders and Findings with employees relocates to light‐work. Respect to Each Issue Company Response: Company agree and continuously commited to protect reproductive rights. Appendix D contains list of stakeholders contacted. Auditor comment: Accepted, note worthy positive Methodology used was private meeting on 5 February comment. 2013 and conducted by the audit team member with social auditing background. Stakeholder consultation Contractor: carried out to reach internal and external stakeholders. Comment: Company committed to health and safety. PT Participants from gender committee chairperson, IIS request contractor to provide their worker with worker union representative, community insurance. Company only employed skilled contractor, representative, Scheme Smallholders and their head of worker must holds valid operator license. cooperatives, contractors and government officials Company Response: Company agree and continuously from local village. commited to follow all labour regulation. Auditor comment: Accepted, note worthy positive During stakeholder consultation there was no negative comment. comment or feedback received. Interview with local village was very positive and some suggestion was given to the company for continuous improvement. 4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY A number of stakeholder’s comment during meeting on 2nd June 2014: 4.1 Date of Next Assessment

The next assessment will be Annual Surveillance Assessment Visit‐3 and scheduled not later than twelve Government: months from the certificate anniversary. Comment: PT IIS – Muara Bulian committed to good relationship and communication. Quarterly coordination meeting in Scheme Smallholder office

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4.2 Date of Closing Nonconformities (Major and Minor)

Table 6. Status of Nonconformities

Reference Category ISSUED CLOSED A824450/1 Major 15/12/2012 31/01/2013 A824450/2 Major 15/12/2012 31/01/2013 A824450/3 Major 15/12/2012 31/01/2013 A824450/1 Minor 15/12/2012 06/06/2014 A824450/2 Minor 15/12/2012 06/06/2014 A824450/3 Minor 15/12/2012 06/06/2014 A824450/4 Minor 15/12/2012 06/06/2014 A824450/5 Minor 15/12/2012 06/06/2014 A824450/6 Minor 15/12/2012 06/06/2014 105536M9 Major 06/06/2014 04/08/2014 105536M20 Major 06/06/2014 17/07/2014 105536N1 Minor 06/06/2014 “Open” 105536N22 Minor 06/06/2014 “Open”

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings

Please sign below to acknowledge receipt of the assessment visit described in this report and confirm the acceptance of the assessment report contents including assessment findings.

Signed for on behalf of PT Inti Indosawit subur

Mr. Welly Pardede Head of Environment & Sustainability Date: 26 September 2014

Signed for on behalf of BSI Group Singapore Pte Ltd

Haeruddin Lead Auditor Date: 02 September 2014

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Figure 1: Location of Muara Bulian Group Estate and Scheme Smallholder

Prepared by BSi Group Singapore Pte Ltd for PT Inti Indosawit Subur

Appendix A: PT Inti Indosawit Subur Time bound Plan

Time bound for Name of Mill Address Status during June 2014 certification

Buatan I Delik & Pangkalan Kerinci Village, Bunut Langgam 2010 Certified on 16 September 2010 District, Pelalawan Regency, Riau Buatan II Delik & PangkalanKerinciVillage, Bunut Langgam 2010 Certified on 16 September 2010 District, Pelalawan Regency, Riau Ukui I Ukui Village, Ukui District, Pelalawan Regency, Riau 2010 Certified on 1 March 2011 Ukui II Ukui Village, Ukui District, Pelalawan Regency, Riau 2010 Certified on 1 March 2011 Tungkal Ulu Pulau Pauh / Penyabungan / MerlungVillage, Tungkal 2011 Certified on 15 August 2012 Ulu District, Tanjung Jabung Regency, Jambi Muara Bulian Singoan / Bukit Sari / BulianJayaVillage, Muara Bulian 2011 Certified on 28 August 2012 / Pemayung District, Batang Hari Regency, Jambi Topaz PetapahanVillage, Tapung District, Kampar Regency, 2013 Stage 1 in December 2013 and Riau Main Asessment in January 2014 Taman Raja Lubuk Bernai / Kampung Baru / Pelabuhan Dagang / 2013 Stage 1 in November 2013 and Pematang Pauh Vilage, Tungkal Ulu District, Tanjung Main Asessment in January 2014 Jabung Regency, Jambi Segati Langkan / Penarikan / Tambak / SotolVillage, Langgam 2014 2014 District, Pelalawan Regency, Riau Tanah Datar Tanah Datar Petatal Village, Talawi District, Asahan 2015 Stage 1 in December 2013 and Regency, North Sumatera Main Asessment in February 2014 Aek Nabara S1‐S3 / Sukadame Village, Bilah Hulu / Kota Pinang 2015 Stage 1 in December 2013 and District, Labuhan Batu Regency, North Sumatra Main Asessment in February 2014 Teluk Panjie Teluk Panjie Village, Kampung Rakyat District, 2015 Stage 1 in December 2013 and Labuhan Batu Regency, North Sumatra Main Asessment in February 2014 Peranap Simelinyang / Pauh Ranap / Sengkilo Village, Peranap 2016 Stage 1 in November 2013 and District, Indragiri Hulu Regency, Riau Main Asessment in January 2014 Bungo Tebo Tuo Sumai / Sungai Rambai Village, PWK Sumai / Tebo 2016 2015 Ulu District, Bungo Tebo Regency, Jambi Tanjung Selamat Kampung Padang Village, Bilah Hilir District, Labuhan 2017 2015 Batu Regency, North Sumatra Gunung Melayu I RahuningVillage, Bandar Pulau District, Asahan 2017 2015 Regency, North Sumatra Gunung Melayu II GontingMahalaVillage, Bandar Pulau District, Asahan 2017 2015 Regency, North Sumatra Negri Lama I Negri Lama Seberang Village, Bilah Hilir District, 2018 Stage 1 in December 2013 and Labuhan Batu Regency, North Sumatra Main Asessment in February 2014 Negri Lama II Negri Lama Seberang Village, Bilah Hilir District, 2018 2018 (So far, All FFBs from third Labuhan Batu Regency, North Sumatra parties) Name of Time bound for Status during June 2014 Address Plantation certification Buatan Delik & Pangkalan Kerinci Village, Bunut Langgam 2010 Certified on 16 September 2010 District, Pelalawan Regency, Riau Ukui & Soga Ukui Village, Ukui District, Pelalawan Regency, Riau 2011 Certified on 1 March 2011

Buatan (Plasma) Kerinci Kanan, Pangkalan Kerinci, Dayun Village, Siak 2011 Certified on 13 March 2012 & Pelalawan Regency, Riau Muara Bulian Muara Bulian & Lubuk Batu Jaya District, Pelalawan & 2012 Certified on 28 August 2012 (Plasma) Inhu Regency, Riau Tungkal Ulu Pulau Pauh/Penyabungan/Merlung Village, Tungkal 2011 Certified on 13 March 2011 Ulu District, Tanjung Jabung Regency, Jambi Muara Bulian Singoan/Bukit Sari/ Bulian Jaya Village, Muara 2011 Certified on 15 August 2012 Bulian/Pemayung District, Batang Hari Regency, Jambi Buatan (KKPA) Kerinci Kanan, Pangkalan Kerinci, Dayun District, Siak 2012 Certified 16 September 2012 & Pelalawan Regency, Riau

Tungkal Ulu Renah Mendalo, Merlung, Muara Papalik District, 2012 Certified 15 August 2012 (Plasma) Tanjung Jabung Barat Regency, Jambi Muara Bulian Maro Sebo Ilir District, Batanghari Regency, Jambi 2012 Certified 28 August 2012 (Plasma) Muara Bulian Maro Sebo Ilir District, Batanghari Regency, Jambi 2012 Certified 28 August 2012 (KKPA) Topaz & Seed Petapahan Village, Tapung District, Kampar Regency, 2013 Stage 1 in November 2013 and Garden Riau Main Assessment in January 2014 Taman Raja & Lubuk Bernai / Kampung Baru / Pelabuhan Dagang / 2013 Stage 1 in November 2013 and Badang Pematang Pauh Village, Tungkal Ulu District, Tanjung Main Assessment in January 2014 Jabung Regency, Jambi Segati Langkan / Penarikan / Tambak / Sotol Village, 2014 2014 Langgam District, Pelalawan Regency, Riau Penarikan & Pangkalan Sarik / Baru Village, Langgam / Siak Hulu 2014 2014 Gondai District, Pelalawan / Kampar Regency, Riau Penarikan (KKPA) Pangkalan Sarik / Baru Village, Langgam / Siak Hulu 2014 2014 District, Pelalawan / Kampar Regency, Riau Gunung Sahilan Gunung Sahilan Village, Lipat Kain District, Pelalawan 2014 2014 (KKPA) Regency, Riau Bahilang Bahilang Village, Tebing Tinggi District, Serdang 2015 Stage 1 in December 2013 and Bedagai Regency, North Sumatra Main Assessment in February 2014 Tanah Datar Tanah Datar Petatal Village, Talawi District, Asahan 2015 Stage 1 in December 2013 and Regency, North Sumatra Main Assessment in February 2014 Aek Nabara S1‐S3 / Sukadame Village, Bilah Hulu / Kota Pinang 2015 Stage 1 in December 2013 and District, Labuhan Batu Regency, North Sumatra Main Assessment in February 2014 Teluk Panjie Teluk Panjie Village, Kampung Rakyat District, 2015 Stage 1 in December 2013 and Labuhan Batu Regency, North Sumatra Main Assessment in February 2014 Peranap Simelinyang / Pauh Ranap / Sengkilo Village, Peranap 2016 Stage 1 in November 2013 and District, Indragiri Hulu Regency, Riau Main Assessment in January 2014 Bungo Tebo Tuo Sumai / Sungai Rambai Village, PWK Sumai / Tebo 2016 2015 Ulu District, Bungo Tebo Regency, Jambi Peranap (Plasma) Simelinyang / Pauh Ranap / Sengkilo Village, Peranap 2016 2016 District, Indragiri Hulu Regency, Riau Bungo Tebo Tuo Sumai / Sungai Rambai Village, PWK Sumai / Tebo 2016 2016 (Plasma) Ulu District, Bungo Tebo Regency, Jambi Tanjung Selamat Kampung Padang Village, Bilah Hilir District, Labuhan 2017 2015 Batu Regency, North Sumatra Pangkatan Sennah Village, Bilah Hilir District, Labuhan Batu 2017 2015 Regency, North Sumatra Sentral & Batu Gonting Mahala Village, Bandar Pulau District, Asahan 2017 2015 Anam Regency, North Sumatra Pulau Maria Rahuning Village, Bandar Pulau District, Asahan 2017 2015 Regency, North Sumatra Negri Lama Negri Lama Seberang Village, Bilah Hilir District, 2018 Stage 1 in December 2013 and Labuhan Batu Regency, North Sumatra Main Assessment in February 2014 Aek Kuo Aek Korsik Village, Aek Natas District, Labuhan Batu 2018 Stage 1 in December 2013 and Regency, North Sumatra Main Assessment in February 2014

Appendix B: RSPO Certificate Details

PT Inti Indosawit Subur – Muara Bulian Group Singoan/Bukit Sari, Bulian Jaya Village, Muara Bulian, Pemayung District, Batang Hari Regency Jambi, Indonesia.

Certificate Number: SPO 594418 Initial Certificate Issued Date: 28 August 2012 Extension of Certificate with inclusion of Scheme Smallholder: 12 July 2013 Standard: RSPO Principle & criteria: 2007; RSPO P&C Indonesian National Interpretation 2008; RSPO P&C for Scheme Smallholder INA‐SWG 2009; RSPO Supply Chain for CPO Mills Module E – Mass Balance: 25 November 2011.

Muara Bulian I Palm Oil Mill and Supply Base Location Singoan/Bukit Sari, Bulian Jaya Village, Muara Bulian, Pemayung District, Batang Hari Regency Jambi, Indonesia. GPS Longitude: E 103° 12’ 20” Latitude: S 01° 35’ 09” Estate FFB Tonnage processed 44,059 Scheme Smallholder FFB Tonnage processed 145,174 Outgrowers FFB Tonnage processed* 25,000 CPO Tonnage produced 47,232 PK Tonnage produced 12,318 CPO Tonnage Total claimed** 42,495 PK Tonnage Total claimed** 10,881 * Outgrowers is excluded from the Certification scope ** Tonnage volumes claimed are proportion of Company Own Estate and Scheme Smallholder

Appendix C: Assessment Programme

Date Time Description Haeruddin Sedayu Nanang Pratama Mualib Sunday, 11.05 – 12.30 Flight Jakarta – Jambi √ √ √ 01/06/2014 12.30 Travelling to Muara Bulian √ √ √ Monday, 08.30 – 09.00 Opening Meeting (Pertemuan pembukaan) √ √ √ 02/06/2014 - Presentation by PT. Inti Indosawit Subur - Opening meeting by BSI Indonesia (including introduction of team members and assessment agenda). 09.00 – 12.00 Muara Bulian Mill: √ General Information (Ha, FFB Prod. CPO/PK production) and time bound plan verification Muara Bulian estate (Field visit): √ Herbicide application programmes, harvesting, fertilising operations, HCV’s, riparian zones, water management, road maintenance, terracing, chemical stores, fertilizer store, workshops, Hazardous waste, Boundaries inspection, social amenities, housing, landfill, clinic, etc. Stakeholder Interview: √ Head of villages, contractors, Labour union, Gender Committee, workers in estate, etc. 12.00 – 13.00 Makan Siang 13.00 – 16.30 Muara Bulian Mill (Field visit): √ Worker interviews (OSH, contract, salary, etc), PPE, safe working environment, walk ways, signs, EFB. POME treatment, emissions, diesel tanks, fire extinguishers, first aiders and boxes, etc. Muara Bulian estate (Field visit): √ Herbicide application programmes, harvesting, fertilising operations, HCV’s, riparian zones, water management, road maintenance, terracing, chemical stores, fertilizer store, workshops, Boundaries inspection, worker interviews, social amenities, housing, landfill, clinic, interview with local communities, social issues, etc. (Continue) Stakeholder Interview: √ Head of villages, contractors, Labour union, Gender Committee, workers in estate etc. (Continue) Tuesday, 08.00 – 12.00 Document Review: √ 03/06/2014 Muara Bulian Mill (RSPO P & C and SCCS) Document Review: √ √ Muara Bulian Estate 12.00 – 13.00 Lunch 13.00 – 16.30 Document Review: √ Muara Bulian Mill (RSPO P & C and SCCS) (Continue) Document Review: √ √ Muara Bulian Estate (Continue) Wednesday, 08.00 – 12.00 Field Visit: √ 04/06/2014 KUD Barokah 12.00 – 13.00 Lunch 13.00 – 16.30 Document review: √ √ √ KUD Barokah Thursday, 08.00 – 12.00 Field Visit: √ √ √ 05/06/2014 KUD Makmur Rejeki 12.00 – 13.00 Lunch 13.00 – 16.30 Document review: √ √ √ KUD Makmur Rejeki

Date Time Description Haeruddin Sedayu Nanang Pratama Mualib Friday 08.00 – 10.00 Muara Bulian Estate: √ √ √ 06/06/2014 Continue document review; gather outstanding data/information and preparing report for closing meeting. 10.00 – 11.30 Closing Meeting √ √ √ 11.30 – 13.00 Lunch / Jumat Pray 13.00 Travelling to Jambi √ √ √ Saturday, 06.30 – 07.30 Flight Jambi – Jakarta √ √ √ 07/06/2014

Appendix D: List of Stakeholders Contacted

Scheme Smallholders Local Communities Bulian Jaya Village Representative KUD Barokah Smallholders and Cooperative Head Karya Mukti Village Representative KUD Makmur Rezeki Smallholders and Cooperative Muara Bulian Sub District Representative Head Internal Stakeholders NGO and Others

PT IIS – Muara Bulian Group Management team and WWF Indonesia – Riau branch Staff SPSI (Worker Union) of PT IIS Head of the Sustainability Department Manager of the Stakeholder Relation Department General Manager Plasma Manager and Assistants Mill Managers and Assistants Estate Managers and Assistants Facility Administrators Gender Committee Representatives Doctor and Clinic Assistants Male and Female workers

Government Departments

District Labour Office District Agriculture Office District Cooperative Office District Environment Office

Appendix E: Supply Chain Assessment for the Mills (Module E: Mass Balance)

Requirements E.1. Documented procedures E.1.1 The facility shall have written procedures and/or work The mill has established Procedure of supply chain as documented in procedure instructions to ensure implementation of all the elements No.AA‐MPM‐OP‐1400.17‐R1. specified for Mass Balance (MB) supply chain requirements. Record of purchasing and sales is documented in Computerized syatem. Person in charge to handling of RSPO Supply Chain is Mill Manager as determined in SOP. E.1.2 The facility shall have documented procedures for receiving Procedure of receiving and processing FFB No.AA‐MPM‐OP‐1400.18‐R1. and processing certified and non‐certified FFBs. Certified and non certified FFB is separated in administration. E.2. Purchasing and goods in E.2.1 The facility shall verify and document the volumes of According to relevant procedure as above (E.1.1 and E.1.2), daily records are certified and non‐certified FFBs received. prepared at the entry point at the weighbridge. “Sustainable” stamp identified at the weighbridge. Daily summary and monthly summary documented for all the certified and non certified FFB. Records verified by internal and external audit. Example: FFB received dated 2nd June 2014, from block A 92 – Muara Bulian Estate, total 5,240 Kg, serial No.149166, truck ID. BH 8148 MF Receorded in weighbridge computerized, separates certified FFB and non‐certified FFB automatically.

E.2.2 The facility shall inform the CB immediately if there is a Non conformances product handling by “Berita Acara” projected overproduction. E.3. Record keeping E.3.1 The facility shall maintain accurate, complete, up‐to‐date Organization provided "Laporan Harian Pabrik" in which indicating the sustainable and accessible records and reports covering all aspects of and non‐sustainable FFB received. The daily report also shows the sustainable and certified and noncertified palm products. non‐sustainable CPO and palm kernel balance for the day. Further "Laporan Harian Pabrik" shows the delivery of sustainable and non‐sustainable CPO and palm kernel and the balance for the day. Organization also provided evidence of delivery note from cooperative in which stamped with "RSPO certified" to indicate the sustainable FFB delivery. Daily records are prepared at the entry point at the weighbridge. Daily summary and monthly summary documented for all the certified and non certified FFB. Records verified by internal and external audit. Records: Laporan Harian Pabrik (Mill daily report), and Laporan Unit Pabrik (Mill Monthly Report). E.3.2 Retention times for all records and reports shall be at least According to relevant procedure above (E.1.1 and E.1.2) the retention period is five (5) years specified as 10 years and financial documents retained longer based on the local regulation requirement. E.3.3 (a) The facility shall record and balance all receipts of RSPO According to Procedure AA‐MPM‐OP‐1400.18.R2 (Mass Balance) All the inventory certified FFB and deliveries of RSPO certified CPO, PKO and palm records are maintained and updated on three monthly reports. No PKO and Palm kernel meal on a three‐monthly basis. kernel meal at both mill sites. E.3.3 (b) All volumes of palm oil and palm kernel oil that are Computerized system in place with the delivery deducted accordingly. delivered are deducted from the material accounting system according to conversion ratios stated by RSPO. E.3.3 (c) The facility can only deliver Mass Balance sales from a Only positive stock id delivered. No short selling. positive stock. However, a facility is allowed to sell short. E.3.4 The following trade names should be used and specified in Facilities use Mass Balance model and indicated on the relevant documents, such as relevant documents, e.g. purchase and sales contracts, e.g. weighbridge ticket, Delivery order, and contract. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated. E.3.5 In cases where a mill outsources activities to an No outsourcing activities. independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. E.4. Sales and goods out E.4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information (a) The name and address of the buyer Name and address of buyer written on the invoice. (b) The date on which the invoice was issued Date is written. (c) A description of the product, including the applicable supply Product description and supply chain model is written. Mass balance model. chain model (Segregated or Mass Balance) (d) The quantity of the products delivered Quantity in tones. (e) Reference to related transport documentation Weighbridge documents and D/O includes all the transport references. E.5. Training

E.5.1 The facility shall provide the training for all staff as required Staffs in the weighbridge, inventory, storage and processing, document control to implement the requirements of the Supply Chain Certification have attended training. Systems. Organization provided training RSPO supply chain and traceability on 28th February 2013 and 2nd July 2013 for all staff from Muara Bulian Palm Oil Mill. Interview with PT IIS’s marketing staff through phone call shows understanding of RSPO supply chain.

E.6. Claims E.6.1 The facility shall only make claims regarding the use of or No claims made because the CPO is delivered/sold to downstream refineries. support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

Muara Bulian Palm Oil Mill Certified Mill Production 1 January – 31 December 2013 (in tonnes) Capacity CPO PK CPKO 60 TPH 37,243 MT 9,188 MT None

Certified Mill Production 1 January – 31 December 2014 (budget) Capacity CPO PK CPKO 60 TPH 42,495 MT 10,881 MT None

Budget 2014 Muara Bulian Mill Mill CPO PK Muara Bulian Estate 10,266 MT 2,533 MT Scheme Smallholder 32,229 MT 8,348 MT Total 42,495 MT 10,881 MT

Sales Certified CPO (UTZ Certificates) as at June 2014 12 July 2013 – 11 July 2014 Month Buyer (CPO) Tonnes/Certificates 12 July 2013 – 11 July 2014 Buyer 1 (classified) 8,500 MT

Sales Certified CPO (GreenPalm Certificates) 12 July 2013 – 11 July 2014 Month Buyer (CPO) Tonnes/Certificates Aug 2013 Trade in GreenPalm 1,500 MT Sept 2013 Trade in GreenPalm 1,000 MT Oct 2013 Trade in GreenPalm 1,000 MT Nov 2013 Trade in GreenPalm 3,772 MT Dec 2013 Trade in GreenPalm 3,000 MT Apr 2014 Trade in GreenPalm 500 MT TOTAL 10,772 MT

Sales Certified PK (GreenPalm Certificates) 12 July 2013 – 11 July 2014 Month Buyer (PK) Tonnes/Certificates Jul 2013 Trade in GreenPalm 300 MT Sept 2013 Trade in GreenPalm 350 MT Oct 2013 Trade in GreenPalm 300 MT Nov 2013 Trade in GreenPalm 750 MT Dec 2013 Trade in GreenPalm 1,100 MT TOTAL 2,800 MT

Sales Certified PKO (GreenPalm Certificates) 12 July 2013 – 11 July 2014 Month Buyer (CPO) Tonnes/Certificates None Trade in GreenPalm None ... Trade in GreenPalm ... TOTAL ...

Certified FFB Received Monthly – 1 January – 31 December 2013 Month Company Estate Associated Total Smallholder FFB/Month Jan‐13 3,131 12,506 15,637 Feb‐13 2,742 9,323 12,065 Mar‐13 2,513 8,877 11,390 Apr‐13 2,563 9,687 12,250 May‐13 2,503 9,901 12,404 June‐13 2,456 8,461 10,917 Jul‐13 2,479 8,572 11,051 Aug‐13 2,558 9,611 12,169 Sep‐13 3,673 12,506 16,179 Oct‐13 3,680 13,991 17,671 Nov‐13 4,257 15,091 19,348 Dec‐13 3,320 13,174 16,494 TOTAL 35,876 131,699 167,575